Cyclicals fell more than 35% in the first year after the 1929 market bottom.
In the last four weeks, defensive stocks have outperformed cyclicals by one of the greatest margins in history, according to BlackRock, a fund-management group.
Still, the rotation from cyclicals to defensives might be delayed this time around.
Consequently, these cyclicals should be able to shield some of the initial tax burden, he said.
If cyclicals do not gain when inflation rises, take that as a sinister sign for the economy's future.
"We try to think in terms of cyclicals and defensives rather than purely growth and value," says Dwek.
As that happens, expect another sharp move higher in USDT yields and cyclicals in general," said Evercore.
Instead of recommending a rotation out of cyclicals, she argued the recovery trade still has further to run.
The market has been one step ahead, with investors rapidly dumping defensive assets for cyclicals and value stocks.
With its high beta to global trade and a 54% exposure to defensives and cyclicals, the index is well placed to gain, the note added.
Cyclicals refer to companies such as restaurant chains, furniture retailers and hotels that sell discretionary products and services.
The resurgence in tech stocks on Tuesday came at the cost of cyclicals, or stocks of companies poised to benefit from an economic recovery.
"Stocks with the highest percentage of sell-side buy ratings, high buyback yields, high dividend yields, cyclicals, high short interest, and high net debt to cap outperformed."
"A pullback might not mean therefore that we're testing the March lows, since it's only really been in the last couple of weeks that cyclicals have led defensives and bond yields moved.
Cyclicals were the biggest winners, with the energy, financials, and industrial sectors posting double-digit gains during that period given that they are closely correlated with the fluctuations of the economy.
Strong GDP growth expectations are in part what's going to drive a rebound in these cyclicals, as these are linked with the economy, and a strong economic reactivation will benefit them in terms of return on equity.
Elevated consumer savings and the reopening of the economy in the second half of the year due to successful vaccines are likely to further fuel the rally in cyclicals and the reflation theme that began in August 2020, she wrote.
"I think people grossly underestimate how strong growth is going to be, so we've rotated a lot into cyclicals almost across the board in places like housing, homebuilding, parts of chemicals, commodities, some small exposure to energy," Rieder said.
Goldman analysts selected a basket of names that outperformed the bank's broad cyclicals basket during the outperformance of growth stocks last year and has also performed better since value stocks came into favor in early November, with the arrival of a number of successful COVID-19 vaccines, the note said.
What she recommends: Value stocks, companies with big percentages of buy ratings, high buyback and dividend yields, cyclicals, heavily-shorted stocks, and high net debt to cap ratios, US stocks over international, and sectors including consumer discretionary (non-internet) companies, energy, banks, industrials, materials, REITs, and utilities.
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What she recommends Value stocks companies with big percentages of buy ratings high buyback and dividend yields cyclicals heavily-shorted stocks and high net debt to cap ratios US stocks over international and sectors including consumer discretionary non-internet companies energy banks industrials materials REITs and utilities