Bloomberg: Our U.S. large-cap scorecard isn't convinced the recent recovery rally in the most downtrodden S&P 500 stocks will morph into a full-blown leadership transition. Large-cap TMT and health care remain on top, elevated primarily by price momentum and breadth, with generally robust earnings outlooks especially supportive of communications headed into summer. Emerging signs of a stronger earnings recovery for domestic cyclicals may be required before the scorecard will support a durable rotation into new leadership.
After significant price recovery off the March low, relative value no longer clearly favors value-oriented sectors such as industrials and discretionary, and points to defensive segments and energy as highest value. This view is skewed by negative -- and extremely depressed -- earnings for cyclical segments.
After significant price recovery off the March low, relative value no longer clearly favors value-oriented sectors such as industrials and discretionary, and points to defensive segments and energy as highest value. This view is skewed by negative -- and extremely depressed -- earnings for cyclical segments.