So what does this mean for investors? There are a few implications.
Should the shift to value from growth continue, beneficiaries are likely to include U.S. large- and mega-cap stocks and potentially U.S. financial sector shares.
In addition, investors should continue to expect outsized volatility in the two- to five-year part of the yield curve. You can read more about my equity and bond outlooks in my Investment Directions monthly market commentary.
Source: Bloomberg, BlackRock research
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist. He is a regular contributor to The Blog and you can find more of his posts here.