Sam Stovall, S&P’s chief economic strategist, says he has a neutral exposure to stocks, with an overweight in international. “We have split up the 60% allocation to stocks into 40% toward U.S. equities, which is 5% below our benchmark of 45%, and 20% toward international equities, 5% above our benchmark of 15%.” With a risk of the S&P 500 advancing 6% in 2008, Stovall says he is currently embracing defensive sectors at this point, such as consumer staples, energy, and healthcare, while he avoids the cyclical sectors. As for a recession, Stovall gives it a 50/50 chance. “We think first quarter GDP will only be up 0.4% placing us close to recession,” he notes.