Friday Morning Coffee Nr. 88: Reversal to the mean

230120 Friday Morning Coffee

Friday Morning Coffee Nr. 88: Reversal to the mean

It is still too early in the year with less than 20 active trading days to draw any conclusions. We note however that the beginning of the new decade was quite unfavorable for value since the MSCI Europe Value Index underperformed the MSCI Europe Growth Index by 3.5% year-to-date. As in the US, European investors appeared to prefer highly valued technology companies to their lowly valued cyclical counterparts. We find this surprising as the business climate in Europe starts to noticeably improve.