Not all value stocks are valued the same
Research Signals - December 2021
At the conclusion of the two-day policy meeting ending 15 December, the Federal Open Market Committee (FOMC), as widely expected, stated that it will accelerate the taper of its bond purchases and anticipates raising the federals funds rate target around mid-2022. Throughout 2021, the value/growth cycle has reacted to the trend in yields as equity and bond markets priced in developing inflation and economic growth expectations. As value stocks stage a comeback in this anticipated increasing rate environment, we take a closer look at the traditional value sectors and find nuances between cyclical and defensive value stocks.
- Cyclical Energy and Financials sectors have outstripped the market and further outpaced defensive Healthcare, Consumer Staples and Utilities sectors to date in 2021
- During the recent expansion in corporations' stock buyback programs since early 2020, the steadier pace of share repurchases by cyclical value sectors has provided a tailwind heading into 2021
- Defensive value sectors have seen a higher drag from negative revisions and greater uncertainty in current fiscal year earnings estimates
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
Follow Financial Services
- July 2022 Model Performance Report
- Securities Finance July Snapshot 2022
- iBoxx SGD Monthly Update: August 2022
- iBoxx USD Asia ex-Japan Monthly Update: August 2022
- Stocks rally as bears take a summer recess
- iBoxx ALBI Monthly Update: August 2022
- Dividend Forecasting Bi-weekly Brief APAC (02 Aug 22)
- Are ransomware events considered in your Operational Resilience Plans for third party service providers?
Join our webinar on Thursday, 19 May as we explore the impact of sustained inflation on dividend payments in 2022… https://t.co/jUwPoVmJFw
Join our webinar next week in partnership with Supply Management Insider as the industry experts unveil the necessa… https://t.co/iibJIqHM00