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Carlyle Group co-founder David Rubenstein believes investors looking to scoop up deals and position themselves for long-term growth should act now instead of waiting for stocks to bottom. |
Big investors from NYS Common Retirement Fund, CPP Investments and Xponance dove into a slew of uncertainties, including geopolitical turmoil, climate change, pandemics and inflation. |
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Value investors make a big comeback with one of their best months since 1978 |
Value investors have come back with a vengeance as inexpensive stocks pulled off a historic month of outperformance against growth names. The Russell 1000 Value index jumped 10.1% in October, beating its growth counterparts by 4.3 percentage points. The value outperformance spread is in the 96th percentile of outcomes since 1978, according to Bank of America. The iShares Russell 1000 Value ETF (IWD) raked in $444 million inflows last month during the rally. "We continue to prefer value over growth, with growth in the middle of a perfect storm of higher rates + weakening fundamentals," Savita Subramanian, BofA Securities head of U.S. equity and quantitative strategy, said in a note. "Value factors have also historically benefitted from year-end seasonality." |
The comeback in value stocks followed a decade-long stagnation trailing growth, particularly technology names. This year, tech has been stifled by rising rates, which makes borrowing more expensive and diminishes growth companies' future earnings. Wall Street strategists have started touting value sectors such as energy, financials and healthcare to lead the rebound out of the bear market. "We continue to prefer US large-cap value stocks, which should see continued support from higher interest rates," said Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management. RBC head of U.S. equity strategy Lori Calvasina said small caps and large-cap value are "best places to be" as long as the strong dollar is a problem as these stocks have less international exposure. |
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Delivering Alpha Headlines |
Big thoughts from the big money
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Jeffrey Gundlach says bonds are far more attractive than stocks |
DoubleLine Capital CEO Jeffrey Gundlach said the bond market has become far more attractive than stocks, such that investors could get an 8% annualized return. The so-called bond king said Treasurys are now "potentially a profit maker." Buying safe government bonds allows investors to shop for riskier, more opportunistic credits in the market, Gundlach said. Spreads on non-Treasurys have widened, including guaranteed mortgages, junk bond yields, emerging market debt and asset back securities, he added. |
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Ken Griffin's hedge fund Citadel is up 30% this year |
Billionaire investor Ken Griffin's flagship hedge fund has notched a 30% return in 2022 with two months left in the year, according to a person familiar with the returns. Citadel's multi-strategy flagship fund Wellington rose 1.52% last month, pushing its 2022 performance to 30.67%, the person said. Despite the stellar performance this year, the fund underperformed the broader market last month. The S&P 500 rallied 8% in October, while the blue-chip Dow soared 14% for its best month since 1976. |
| Leon Cooperman still sees a recession coming |
Leon Cooperman cautioned that the final bottom of the stock market is yet to come as the economy is poised to hit a recession next year. The chair and CEO of the Omega Family Office said the market is in a seasonally strong period, but an unfavorable macro environment — the Federal Reserve's aggressive rate hikes, a strong dollar and high oil prices — will still cause a major economic downturn in 2023. "I think we are in a rallying mode seasonally but I still have a cautious view," Cooperman said |
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