A Warning for Europe's Investors

The risks facing cyclical stocks are growing, says S&P's Clive McDonnell, who recommends a defensive strategy for the 12 months or so

At various points in the past two years, Standard & Poor's European equity strategist Clive McDonnell has recommended that investors in Europe shift their assets from cyclical to defensive stocks over the short term for tactical purposes. But in a May 17 report, McDonnell takes things a step further: He writes that the current market situation calls for a "wholesale restructuring of portfolios out of cyclicals and into defensives."

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