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Overweight Value, Cyclicals; Favor Tech, Energy, Industrials

January 3, 2020
Overweight Value, Cyclicals; Favor Tech, Energy, Industrials

In my previous missives about 2020, I outlined our market view from 30,000 feet, so to speak, that our base case outlook is U.S. stocks rise 10% plus—to about 3450 on the Standard & Poor’s 500 index. This is predicated on index earnings growth of about the same amount or better this year.

Let’s dive deeper now and see what styles, sectors and stocks I believe might work in this new year. My basic longer term-premise is that investors should overweight value and cyclical stocks, for reasons I’ll enumerate below. In particular, I favor technology, industrials, energy and basic materials sectors.

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