Eq: Large Cap

(New York)

There has been a lot of talk about the resurgence of value stocks this year, but those who want to stick with growth would be well-served to look at this Barron’s article, which offers five top growth stocks. The picks are based on the opinions of Janus Forty, a massive actively-managed equity fund. Over the last few years the fund has had stellar returns and in this article it chooses Zoetis, S&P Global, Nike, Salesforce.com, and Activision Blizzard. The article gives a thorough discussion of each of the choices.

FINSUM: Good mix of different industries and companies here, and as the market shifts back towards “risk on”, growth stocks may once again be great picks.

Source: Barron’s

(New York)

The US stock market has just hit a rare triple top, with the S&P 500, the Dow, and the Nasdaq all hitting a new peak on the same day. It is the first time since 1999 that this happened. To some, this might be a great contrarian indicator of a situation about to bust, but this Wall Street Journal article says things may be ready to move higher. The big rise in indexes is defying the fact that earnings have been falling quarter after quarter, but traders think we might be set for a “melt up”, where stocks rise strongly after a new high. The big bump could happen next month, when investors return from vacation and take some cash off the sidelines.

FINSUM: We have been indicating that we are cautiously optimistic about the stock market. This is for two reasons. Firstly, because ultra-low rates mean there are few alternatives for where to put your money, and secondly, because earnings losses are starting to slow in velocity, meaning things might have turned the corner.

Source: Wall Street Journal

(New York)

In a world of surging passive investment it is rare to find bad news for the sector, but is has just come. The amount of money raised into equity ETFs plummeted 85% in the first half of 2016 versus the same period last year, dropping from $102 bn to $15 bn. The figures were reportedly hit by the selloff to start the year, and then worries over Brexit, all which combined to greatly slow down the flow of capital into the space. Europe was the hardest hit, and Asia suffered too, but ETFs invested in the North American market continued to perform strongly.

FINSUM: While it is easy to blame this drop on market conditions, the fact that markets were choppy may be giving a small boost to investor’s faith in active stock-pickers. Nonetheless, we think inflows into passive investment are an unstoppable tidal wave.

Source: Financial Times

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