It is the value player's dream: A revaluation of growth stocks. Since we're halfway through the earnings season, it's worth asking if this long-awaited moment is finally underway. Since the financial crisis, tech stocks have outperformed value. But the headline for the earnings season so far is that things are better than expected outside of tech. As a result, money in October has been moving into financials, materials, industrials, energy and even small caps. "Exxon is the new FANG," has been a quip on trading desks for the past few weeks. Indeed, Exxon Mobil shares are at a historic high, and its brethren Chevron is the top-performing stock on the Dow this year, up more than 52%. Surprisingly, overall earnings are still positive for both the third and fourth quarter, because the energy and industrials sectors are reporting strong results, while estimates for technology, communication services and consumer discretionary are more deeply in negative territory. Q4 earnings estimates, by sector Energy up 62% Industrials up 43% Health care down 1% Consumer staples down 2% Technology down 3% Consumer discretionary down 3.9% Communication services down 17% Source: Refinitiv The most important development to come out of this round of earnings reports is that the growth rate for technology is slowing considerably. As Nicholas Colas from DataTrek and others have noted, the compound annual growth rate for Big Tech names has been notably reduced, with the CAGR for Apple over the next year expected to be only 6%. Growth for Microsoft is projected at 6% as well, while at Alphabet, it's 14% and at Meta Platforms, it's 7%. Only Nvidia is expected to outperform, with a CAGR of up 37%. Investors have noticed this deceleration in earnings for growth sectors and have been buying classic "value" sectors like energy, industrials and health care this month. Even small caps have had a lift. Sector performance in October Energy up 24% Industrials up 14% S & P Small Cap 600 up 12% Health care up 10% Technology up 9% Communication services up 1% Furthermore, the deceleration in earnings growth for tech is still fairly modest and may have much more to go. Third-quarter arnings growth for tech names is down a modest 1.2% and is only projected down 3.3% for the fourth quarter. "Earnings estimates for tech look too high given elevated US inflation, declining corporate confidence, and a tightening of financial conditions," UBS's Marke Haefele said in a recent note, highlighting that "Tech valuations are cheaper but not yet cheap." While this rotation will be welcome by many, the stock market is still a slave to macro conditions, which are difficult to forecast. Bears are arguing that overall earnings have not been sufficiently cut to account for an even mild recession. As a result, they see October's 8.8% rally as another bear market rally, one of a string of several this year. "It has been a nice rally over the last few weeks, coinciding with a pullback in rates and the U.S. Dollar," BTIG's Jonathan Krinsky said in a note to clients. "There has clearly been some rotation beneath the surface, which is encouraging, but our sense is we are nearing the latter innings of that, and see risk heading the other way into November." Krinsky wasn't alone in his caution about earnings estimates. "We see clear signs of softening in the EPS-related stats, even though the sharp cuts that many investors have clamored for remain elusive," RBC's Lori Calvasina said in a recent note.