- Analytics
- News and Tools
- Market News
- Three reasons to see a renewed period of relative strength for value over the near term – UBS
Three reasons to see a renewed period of relative strength for value over the near term – UBS
Value outperformance should resume amid rates uncertainty, in the opinion of economists at UBS.
Price pressures remain, despite an easing of headline inflation
“Based on data going back to the 1970s, value stocks have outpaced growth when inflation is over 3%. The latest US consumer price index release for January has reinforced our view that inflation is only likely to fall below this level later this year.”
Fed officials have stressed that further rate hikes are essential, a greater potential drag for growth sectors
“Growth sectors tend to suffer more from higher rates since this reduces the current value of more distant profits. So, the recent hawkish tone of comments from top Fed officials could also tilt the balance between growth and value sectors.”
Tech, the largest growth sector, faces additional headwinds beyond rate worries
“The MSCI World IT sector trades on a 12-month forward price-to-earnings multiple of 22 times, 20% above the sector’s 10-year average, as of 13 February. By contrast, value sectors are generally more moderately priced. In addition, we expect global tech sector earnings growth to slow further due to a weaker enterprise outlook and lukewarm consumer demand.”
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
