USMC - It Is Time To Balance Growth With Value
2024-03-10 12:28:24 ET
Summary
- Good news in the job market should lead to a soft landing and rate cuts by the Fed, which begin no later than June.
- Growth may have hit its peak relative to value, as evidenced by outflows from technology funds and semiconductor stocks trading at a record premium.
- Small-cap stocks are starting to outperform, suggesting a rotation away from technology stocks and potential outperformance in sectors like healthcare, financials, materials, industrials, and energy.
Last week may have marked a pivotal moment in this bull market cycle, and it is not because the S&P 500 finished lower for the week for only the third time in the past 19 weeks. On the contrary, there was an abundance of good news. A stellar jobs report for February showed continued job creation alongside softer wage growth for a labor market that is gradually cooling. That is what we need to maintain the disinflation trend that leads to a soft landing and the beginning of an easing cycle by the Fed. As a result, the probability in the futures market that the first rate cut comes in June increased meaningfully, and the consensus expectation is back to a full percentage point reduction by the end of 2024....
It Is Time To Balance Growth With Value