The S&P’s Record Push Relies on a Questionable Theory
Some might say that value stocks are finally performing, without a rotation away from growth names. There’s something else at play.
More fragile than he looks.
Photographer: Michael Nagle/BloombergThe Covid-19 recovery is taking very different shapes in the world’s two largest economies. In the U.S., retail sales have staged a striking rebound to pre-pandemic levels, while industrial production remains sluggish. The opposite is true in China, where factories are churning but shoppers aren’t spending.
Many see China’s industrial rebound as a plus for cyclical stocks. In August, energy and industrial companies gained 5.9% and 7.6%, leading the S&P 500 Index toward a record close. The retail revival, meanwhile, is lifting growth stocks, with consumer names continuing their slow, upward crawl.