Bond Yield Peaks and Growth Stock Bottoms

Growth Stocks have clearly been impacted by Bond Yields. Especially the long duration growth equity managers. Is the impact now in the price?

Aug 2022

Equity

Long Duration Equity Growth Pricing

Whether Bond Yields have peaked was a common search query that had nothing to do with bond allocations. The insights that were viewed were from asset managers running long duration equity portfolios i.e. growth strategies.

Given the underperformance of this segment of the market in the first half of the year, and the poor 18 month outlook for growth, institutional investors seem to be assessing whether the market is now at fair value.

U.S. Equity

Reflation and the 3Ds

Epoch Investment Partners

Expect an Increased Focus on Capital Allocation, Quality and Sustainable Free Cash Flow

Until recently, we had been in a disinflationary environment since the 1980s, when Volcker helmed the Fed. This secular trend reflected three forces: (1) Correcting the policy mistakes made in the ’60s and ’70s that stoked stagflation, (2) the increasingly globalized nature of trade, investment, and finance from the mid-1980s, and (3) the deflationary impact of tech, which has been especially impactful during the last two decades. While the latter factor remains in place, we believe it is being overwhelmed by the 3Ds — Deglobalization, Demographics and Decarbonization — meaning we have entered a secular reflationary environment.