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Rotation to Value Here to Stay as Fed Desperate to Vanquish Inflation Boogeyman

By Yasin Ebrahim AiVIF.com – The rotation to value from growth stocks has staying power as the sector can count on a powerful ally: A Federal Reserve desperate to rein in...
Rotation to Value Here to Stay as Fed Desperate to Vanquish Inflation Boogeyman © Reuters.

By Yasin Ebrahim

AiVIF.com – The rotation to value from growth stocks has staying power as the sector can count on a powerful ally: A Federal Reserve desperate to rein in inflation.

The Invesco S&P 500 Pure Value exchange-traded fund has racked up gains of about 7% this year, while S&P 500 Growth Index is down about 5% year to date fuelled by bets a rising interest rate will hurt sectors of the market with longer-term cash flow horizons like tech, or growth stocks.

Unlike previous rotations to value, which just last year proved to be fleeting, the current rotation has staying power as the Fed’s “narrative has changed dramatically,” Johan Grahn, Head of ETF Strategy at Allianz told AiVIF.com in an interview earlier this week.

In the space of a few months, the Fed has moved on from “not even thinking about thinking about raising rates,” ditched “transitory” from its inflation vocabulary, and laid out the red carpet for policy normalization.

“Last year, the Fed was talking about potentially taking a little action in 2022, but it was really thinking about only doing something in 2023. But now the Fed is signalling that we're going to do everything we can as soon as we can,” Grahn added.

“The rotation into value is more likely to stick around than it was last year, based on what the Fed is signalling and what we're seeing in the bond market,” he added.

Hot debate has broken out on Wall Street about what exactly the new normal for the Fed will look like. A rate hike in March followed by several more hikes to take the Fed funds terminal rate to 2.5% by 2024? The start of quantitative tightening, or a balance sheet runoff starting in July?

While the guessing game on “normal” will continue for some time, there is no doubt that the Fed is having to play catch up, and may have to move faster on policy tightening as its tools are blunt to combat a supply-driven inflation.

“Inflation is going to be hanging over our heads for a longer period of time and I think that the Fed is going to have no choice but to continue to move their rates up,” according to Grahn.  “I happen to believe that they might move in a faster pace.”

“The consensus now is for rate hikes of about 25 basis points per quarter, but at some point, I wouldn't be surprised if they said we're going to hike by 50 basis points ... that will trigger a quick rotation in value again.”

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26-01-2022 10:09:33 (UTC+7)

EUR/USD

1.1285

-0.0014 (-0.12%)

Summary

Neutral

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (3)

Sell (5)

EUR/USD

1.1285

-0.0014 (-0.12%)

Summary

Neutral

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (3)

Sell (5)

GBP/USD

1.3500

+0.0004 (+0.03%)

Summary

Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (2)

Sell (3)

USD/JPY

114.36

+0.49 (+0.43%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (9)

Sell (0)

AUD/USD

0.7161

+0.0013 (+0.18%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (2)

Sell (4)

USD/CAD

1.2624

-0.0003 (-0.02%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

EUR/JPY

129.07

+0.42 (+0.33%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (5)

Sell (2)

EUR/CHF

1.0388

+0.0014 (+0.14%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (1)

Gold Futures

1,836.90

-15.60 (-0.84%)

Summary

↑ Buy

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (10)

Sell (0)

Silver Futures

23.887

-0.009 (-0.04%)

Summary

Sell

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (2)

Sell (6)

Copper Futures

4.5080

+0.0580 (+1.30%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (2)

Sell (5)

Crude Oil WTI Futures

87.03

+1.43 (+1.67%)

Summary

Neutral

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (4)

Sell (5)

Brent Oil Futures

88.65

+1.47 (+1.69%)

Summary

Sell

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (1)

Sell (6)

Natural Gas Futures

4.127

+0.233 (+5.98%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (7)

Sell (0)

US Coffee C Futures

239.35

+1.45 (+0.61%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (7)

Sell (0)

Euro Stoxx 50

4,177.45

+99.19 (+2.43%)

Summary

Sell

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (1)

Sell (6)

S&P 500

4,437.46

+81.01 (+1.86%)

Summary

↑ Buy

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (6)

Sell (2)

DAX

15,500.95

+377.08 (+2.49%)

Summary

Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (4)

Sell (2)

FTSE 100

7,510.16

+138.70 (+1.88%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (4)

Sell (5)

Hang Seng

24,289.90

+46.29 (+0.19%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (0)

US Small Cap 2000

2,040.80

+36.00 (+1.80%)

Summary

Neutral

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (3)

Sell (5)

IBEX 35

8,652.50

+173.00 (+2.04%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (3)

Sell (6)

BASF SE NA O.N.

67.660

+2.330 (+3.57%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (2)

Sell (6)

Bayer AG NA

51.73

+0.91 (+1.79%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (3)

Sell (6)

Allianz SE VNA O.N.

225.08

+5.03 (+2.29%)

Summary

↑ Buy

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (7)

Sell (0)

Adidas AG

245.46

+7.71 (+3.24%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (4)

Sell (4)

Deutsche Lufthansa AG

7.034

+0.357 (+5.35%)

Summary

↑ Buy

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (10)

Sell (1)

Siemens AG Class N

141.98

+3.46 (+2.50%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

Deutsche Bank AG

11.457

+0.383 (+3.46%)

Summary

Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (5)

Sell (0)

 EUR/USD1.1285Neutral
 GBP/USD1.3500Sell
 USD/JPY114.36↑ Buy
 AUD/USD0.7161↑ Sell
 USD/CAD1.2624↑ Buy
 EUR/JPY129.07↑ Buy
 EUR/CHF1.0388↑ Buy
 Gold1,836.90↑ Buy
 Silver23.887Sell
 Copper4.5080Neutral
 Crude Oil WTI87.03Neutral
 Brent Oil88.65Sell
 Natural Gas4.127↑ Buy
 US Coffee C239.35↑ Buy
 Euro Stoxx 504,177.45Sell
 S&P 5004,437.46↑ Buy
 DAX15,500.95Buy
 FTSE 1007,510.16Neutral
 Hang Seng24,289.90↑ Buy
 Small Cap 20002,040.80Neutral
 IBEX 358,652.50↑ Sell
 BASF67.660↑ Sell
 Bayer51.73Neutral
 Allianz225.08↑ Buy
 Adidas245.46Neutral
 Lufthansa7.034↑ Buy
 Siemens AG141.98↑ Buy
 Deutsche Bank AG11.457Buy
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank6,190/ 6,240
(-5/ -5) # 1,175
SJC HCM6,180/ 6,245
(-10/ -10) # 1,179
SJC Hanoi6,180/ 6,247
(-10/ -10) # 1,181
SJC Danang6,180/ 6,247
(-10/ -10) # 1,181
SJC Nhatrang6,180/ 6,247
(-10/ -10) # 1,181
SJC Cantho6,180/ 6,247
(-10/ -10) # 1,181
Cập nhật 26-01-2022 10:09:35
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ↀ Giá vàng thế giới
$1,835.85-13.89-0.75%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-IV2486025350
RON 95-II,III
E5 RON 92-II2359024060
DO 0.05S1890019270
DO 0,001S-V1925019630
Dầu hỏa1779018140
ↂ Giá dầu thô thế giới
WTI$87.19-0.3-0.35%
Brent$89.85-0.25-0.28%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.460,0022.770,00
EUR24.918,8126.315,80
GBP29.789,2431.061,45
JPY192,82204,12
KRW16,3519,92
Cập nhật lúc 18:54:49 26/01/2022
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