Pursuits
Recession Bet Sends Cyclicals to 2009 Low, Luring BlackRock
This article is for subscribers only.
The biggest rally in a year for companies most tied to economic growth is generating gains for BlackRock Inc. and Federated Investors Inc., and the advance may continue after valuations slipped to a two-year low.
The price-earnings ratio for the Morgan Stanley Cyclical Index tracking manufacturers, commodity producers and transportation companies has been 6.7 percent below the multiple for the bank’s consumer index, a measure of drugmakers and food companies, on average since April 29. The discount is the widest since May 2009, two months after the Standard & Poor’s 500 Index completed a 57 percent drop, its worst decline in almost eight decades, data compiled by Bloomberg show.