21st June 2021 Morning Report

Monday 21st June 2021

The Federal Reserve's indication last week that they will be becoming more hawkish has forced investors to re-evaluate the rally in so-called value stocks, which have taken a hit in recent days after moving higher for most of the year. Banking, energy shares in particular tumbled following the Fed comments.

The Russell 1000 Value Stock Index is down 4% from its June peak, though still up 13.2% this year, while growth stocks are up 9.1% year-to-date. Value stocks had gotten ahead of themselves. However, many seasoned commentators believe the recent wobble in value stocks is a pause, rather than a turning point. Currently cyclical stocks are relatively the least over -valued, trading on average 40% above their historical while growth stocks are trading at double their 10 -year averages.

Investors will be keeping a close eye on this week’s economic data for further clues on whether inflation will persist, given that consumer prices accelerated at their fastest pace in

Morning Report 21 June 2021

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