Today's Post - https://bahnsen.co/3RMxbqz

A second down day in the new year, and of course two days isn’t a trend but frankly after nine consecutive positive weeks in markets, some consolidation and back filling is healthy and welcome. I do hope you all are feeling as refreshed and recharged after your Holiday time with family and friends as I am, and while there was less Christmas snow in Utah then I would have liked, there is plenty of fresh market data for us to go through today.

While 2023 saw an outperformance of growth over value, as it essentially just recouped what it lost the year prior, its interesting to note the recent shift the other way. From the lows of late October, the SP500 rallied 17%, but the equal weighted index outperformed large cap tech by a shocking 5% with a rotation to value. As David mentioned this morning on CNBC, starting point valuations can be critical for investor outcomes. With an average estimate for earnings in 2024 at $244 a share, the SP500 trades at 20X earnings. Equal weighted, you get something closer to 16X and some of this recent rotation appears cognizant of those other sectors offering better relative value. Could this continue? Well, while markets were meaningfully higher last year, the largest flows still went to money market funds at +$1.34T, which now hold a stunning $5.87T of cash (aka dry powder).

Links mentioned in this episode: