With a volatile first half of the year in the books, investors are looking ahead to what market trends could continue — or reverse course — in the second half. One macro expert told CNBC’s “Trading Nation” she’s looking for a rotation to play out from so-called growth stocks into value stocks in the coming months.
Gina Sanchez, CEO of Chantico Global, explained why she’s expecting beaten-down value names to fall back into favor.
• The consumer staples, industrials and telecom sectors proved to be the market’s biggest losers in the first half of 2018, and higher interest rates were thought to be the culprit of the underperformance. Meanwhile, technology and consumer discretionary (home to many “growth” stocks) were the biggest winners.
• Now that caution has steadily crept back into the market this year amid rising global trade tensions, political uncertainty abroad and an increasingly aggressive Federal Reserve, investors may steadily return to these names that traditionally offer “safe” returns.
• Furthermore, expanding multiples of high-flying stocks within the technology and consumer discretionary have come into focus, which may tempt investors to ditch “growth” stocks and turn to “value.”
Bottom line: Value stocks, largely unloved in the first half of 2018, may fall back into favor as investors grow cautious.