The State of the Business Cycle March 2016

I just got the quarterly Cycle report from Fidelity.  Quite extensive and very nicely done.  The economy is actually in good shape contrary to all the false hype coming out of the GOP debates.  Of course we all know those clowns just make it up as they go.

They make a strong case that we are just entering the “late-cycle” and that the U.S. recession risk is low.  Here is a chart of where we stand in the cycle relative to the other three largest economies.   What usually drives the transition from mid-cycle to late-cycle is inflation, which regarding commodities, has been absent.  Wages have been increasing and therefore wage inflation has been gaining traction.

Fidelity March 2016 Economic Cycle

Historical performance patterns of stock sectors is as follows and could be used as a guide, going forward, in your investing allocations.

Fidelity Sector Performance Patterns