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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EQUITIES
- Since the start of the pandemic, one interesting observation has been the collapse in the growth vs. value stocks correlation (we look at the 6M correlation of daily price returns of the growth and value indexes of Russell 1000).
- After constantly rising in the past 15 years, the growth-to-value ratio has been falling in the past 9 months with value stocks outperforming growth stocks since September 2020.
- Investors have argued that the persistence of inflation in the US (but also globally) could lead to a 'Great Rotation' from growth to value stocks in the medium to long run.
- Even though some participants would disagree with that statement and continue to be bullish on growth stocks as Fed continues to fuel the market with liquidity, the chart below shows a concerning observation; the last time we had an extremely low correlation between growth and value stocks (correl<0.5), what followed was a prolonged bear market in equities.
- Is it different this time?
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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