Mirrored the main index’s return, as oil prices Has had a miserable year, up just 0.6% and packed with beaten-down banks, utilities and oil companies. On that note, Pimco co-founder Bill Gross told followers on X this week that beaten-down mortgage plays were the way to go, saying they offer big yields. So in theory, those valuations could improve with a rate cut next year.īank of America strategists also flagged buying some “diamonds in the rough,” which they described as “the best stocks in the most unloved, levered regions/sectors of banks, utilities, REITs (real-estate investment trusts), U.K. Have suffered this year, as they tend to run in the opposite direction of interest rates, which have climbed more than 500 basis points since March 2022 as the Fed has tried to get a grip on inflation. Valuations for long-dated assets such as biotechs They say that’s based on a view that falling interest rates will lower earnings per share, which is far better for biotechs and renewables than “crowded monopolistic tech.” Hartnett and his team see a big play for next year in so-called “long distressed tech” over that group of high flyers. that have dominated equity returns in 2023, the strategists are less keen on a straightforward bet. Apple UK:AAPL bonds have seen equity-like returns in the past month.Īs for the stocks of the Seven - also including

The latter part of this year has seen money pouring into bonds issued by (almost all) of the Magnificent Seven companies chasing yields that have been climbing amid bets on Federal Reserve rate cuts.

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