Goldman Sachs writes this.....>

GLOBAL MARKET/OPINION: Goldman Sachs writes this morning that we've moved into

the second phase of the rally in risk assets. The first was the leadership of

Growth and Defensive companies. Now the rally is "being driven by a sharp

rotation of leadership towards value and cyclicals...more typical of the kind of

rotation that is seen at bear market lows... [that generally] coincide with an

inflection point in growth momentum indicators".

- Other things they point to in terms of the move into the second phase include:

"weak balance sheet" stocks outperforming strong ones; small caps outperforming

large caps; Europe outperforming U.S.

- They note that "most periods of Cyclical and Value outperformance also

coincide with rising bond yields". GS rate strategists expect further rise in

yields and further curve steepening.

- Looking longer term, they don't see this rotation to be sustained "into a

major trend", "unless growth, bond yields and inflation expectations all rise in

a more meaningful way"...arguing the next cycle is likely to be long but weak.