SYE - Growth Vs. Value

• The financial markets are fighting a tug of war between an accelerating economy, a steepening yield curve, and investing in growth vs. value stocks.
• Growth stocks are considered longer-term duration assets while value stocks, in this instance, are companies tied to the economic recovery with significant operating leverage in the expansion.
• A steepening yield curve, which we continue to forecast, will penalize all multiples, but growth stocks will be hit harder as their multiples compress more as duration shortens.
• Value stocks will benefit from a surge in profits more than offsetting any multiple decline as the recovery gains steam.

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