U.S. equity markets continue to set new highs, powered by an increasingly narrow group of stocks. Setting aside the cognitive dissonance-inducing earnings impacts from the pandemic and subsequent recovery, stocks continue to look expensive vs. their long-term earnings power. With leading economic indicators such as the 10-year Treasury yield, the ISM-Manufacturing PMI index, and upwards earnings estimates revisions all peaking in April, advisors are asking:
Are we seeing a rotation from growth-oriented cyclical stocks to higher-quality defensive names? If so, how can we find value opportunities for our clients among expensive U.S. equities?
Eric Lynch, Managing Director of Scharf Investments, will share his thoughts on today’s markets and discuss why quality matters and where compelling valuation opportunities exist both in the U.S. and abroad.