1205 days ago
A "blip" or the start of something BIG?
Value stocks have been outperforming growth stocks in recent weeks. Since the announcement of favorable interim efficacy data on the Pfizer-BioNTech vaccine on 9 November, the former have beaten the latter by an impressive 9%. Is this just a blip or the start of a longer-lasting trend? Here are the facts: 1) the valuation of value stocks is near record-lows compared with growth stock; 2) the yield curve is likely to steepen, hitting future cash flows of growth stocks, and 3) growth is likely to become less scarce. It does not mean that growth stocks will fall - the Covid-19 crisis has accelerated many already existing trends like digitalization and in a new normal. But there is a chance that value continue to play catch up. Source: Jeroen Blokland (Robeco), Bloomberg
