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Tuesday, December 7, 2021

The Shift from Growth to Value, When?

#growth #value #stocks #election #PresidentTrump


The coming Presidential election could may bring in a shift from growth stocks into value stocks, regardless of the outcome.

Every Presidential vote in at least the last 40 yrs has triggered a potential rotation from 1 market sector to another no matter who is elected.

This year, the action may put value stocks in the headlights after growth shares have surged in this low interest rate scenario that pushed bond yields South

Historically, value always performed pretty well in the 6 months after a presidential election.

Some Wall Street strategists have been backing value stocks since the end of May given the expected shift. The size of the move varied depending on the election outcome.

Policy changes from new administrations brought on the biggest market reshuffle.

If Democrat Joe Biden wins and his party gains control of the Senate, we should see rotation in the market.

If President Trump wins, as he is expected to we could see rotation in the market but not likely.

Some markets watchers believe equities are mostly pointing to a Biden victory, based on the published polling but have grown distrustful of polling in the wake of BREXIT and the 2016 Presidential election.

Stocks may see rotation post-election as very cautious investors are holding on to a huge amount of cash, $15.2-T, a Trump Victory brings that money back in to risk assets and the outcome is DJIA 40,000.

What we are seeing in here is consolidation of the strong move off of the 24 September lows and a Neutral set up ahead of 3 November, and if we have a move to and past the February all time highs next, that is a signal of a Trump Victory.

Have a healthy weekend, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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