Which trade would most likely provide the highest return given the following economic scenario $($i$.$e$.$ which trade makes the most sense$)?$ Assume all else is equal and only focus on GDP direction.$$

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The economy has just peaked and GDP is expected to decline over the next year.

Investors would buy stocks and sell bonds

Investors sell stocks in the manufacturing industry and buy stocks in the consumer staples industry

Investors understand that the economic cycle has nothing to do with mid$-$term stock returns and GDP growth does not impact company earnings in any way.

Investors buy cyclical stocks and sell defensive stocks.