Chemicals

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While Merrill concedes that the “cyclical bounce” that comes with economic expansion has already begun to play out, it’s not a ninth inning situation. That’s echoed in a recent research note from Mark Lushini , chief investment strategist at Janney Capital Management. He notes that virtually all of third quarter earnings growth for the S&P 500 was delivered by the cyclical sectors, led by a 20% year over year gain for Consumer Discretionary. He expects the cyclical leadership to be sustainable, in part based on recent data from the ISM Purchasing Managers Index:

Growth Returns: These Cyclicals Deserve Attention