Expect healthcare to underperform

Recent data has revealed a slowdown in the pace of economic growth. As this slowdown unfolds, and core inflation remains well behaved, the likelihood that the US economy will achieve a soft-landing in the latter part of the year has grown. Interest rates were kept on hold at the last meeting of the FOMC and with a modest tightening expected at the next meeting on 22 August, it is our view that the US is very close to the cyclical peak in short rates. Since mid-May, technology-related stocks have recovered strongly, and now look to have discounted a significant amount of good news. Hence, i...