Growth-Value Rotation. The latest attempt was predicated on expectations of a “blue wave” in the US election, which failed to materialize. But a vaccine may succeed where hopes of a large fiscal stimulus did not, namely, by delivering a sustained and faster-than-previously-thought recovery in growth, employment and inflation. All this points to higher yields. Growth-Value rotation would make the equity rally more sustainable. While the Growth-Value rotation should redefine leadership among sectors, it could at the same time help unlock some more upside for the whole market. We have long argued that Tech needed a bubble to continue performing as it has done in 2020. Since Value sectors are trading at significantly lower multiples than IT, they appear to have much more headroom for further gains. To access these research notes register for trial access.
30 year track record. We have a 30 year track record in making bold, off consensus-calls at major inflection points in economic, political and market cycles. For example, building on our global macro and financial analysis to find imbalances and fragilities, we identified the coming storm of the Global Financial Crisis – identifying the crucial turning point in the cycle and calling the stock market bottom as recovery began. More recently we called the March 2020 Covid-19 sell-off in the S&P 500.