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....the value rally has got legs
Mislav Matejka: "our base case is that we could have 3-4 quarters worth of rotation, similar to the length of the ’16-’17 trade"
1. the starting point remains depressed. Value vs Momentum is still 30% down since the start of '18. Most investors remain long Growth, and the flows were largely tilted in that direction.
2. this time around bond yields will confirm the rotation. May’s attempt was aborted because bond yields didn’t sustainably follow through
3. the macro setup in 1H of 2021 is likely to be supportive of a reflationary regime, with stronger PMIs, less trade uncertainty and normalizing consumer activity