Cyclical value stocks, including shares of companies in the financials, industrials and basic materials sectors will play a catch-up to outperforming megacap technology shares heading into the third quarter of 2023, broadening the stock-market rally and lifting the benchmark S&P 500 index to 4,400, a closely followed Wall Street analyst forecast on Tuesday.
The cyclical growth category includes software , semiconductors , tech hardware , retailing , media, autos and apparels, while the cyclical value category includes banks, materials, transportation, real estate, capital goods and insurance, according to Stifel. Among the 11 sectors of the S&P 500, the financials sector SP500.40 has risen 2% over the past month, while the industrials sector SP500.20 has advanced 0.8% and the materials sector has shed 1.5% over the same period. At the other end of the spectrum, the communication services SP500.50 and information technology sectors SP500.45 have jumped over 10%, thanks to robust gains in megacap growth and tech stocks, according to FactSet data.
“Since Oct. 24, 2022, we’ve preferred the cyclical quadrants , seeing no near-term recession and high but cooler inflation,” said Bannister.
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