Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., March 17, 2020.The firm highlighted that value stocks just experienced their worst decade ever of performance relative to growth stocks, and it can all be explained by a single trade.
Low interest rates, little to no inflation, and a global economic slump account for 79% of the relative returns between growth and value, according to BofA. "Lower growth expectations, lower inflation and a flatter yield curve help growing companies that rely on long-term debt, and those same macro conditions also reduce the worth of short-term dividends, which are typically paid by value stocks," BofA explained.
"Vaccine/reopening progress would likely boost unloved financials and hurt growthy, overbought lockdown portfolios," Bank of America said. The firm noted that this trend was evident during last week's market sell-off, as the Russell 1000 Value index outperformed its growth counterpart by the most since 2008.
😂 One minute it's dead, then when the tech market is up its not dead. Blah blah blah, when the bubble bursts, they will say the opposite. These 'strategists' and 'analysts' have one jib: go with the flow. Market up = good market down = bad, I was right. No original opinions.
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