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Morning Notes — Watching Value Sectors

Watching Value Sectors

July 8, 2020

Since the March 23 low,  value sectors have outperformed for two brief windows matched with decelerating US infection rates in the Northeast (Tri-state area) and Midwest/Mid-Atlantic regions. The last major period of value sector outperformance was in 2016 when the move lasted more than 12 months. Since then, we’ve only experienced 4-6 week-long windows of value sector outperformance. Will the next period of value outperformance also be brief and un-investible? Unfortunately, there’s way too much liquidity now to make that assumption. And the most crowded trades at the moment are long-duration fixed income and Gold. It’s still too early to make the call, but you should at least be prepared to hear it.

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