Value stocks have outperformed growth stocks as buying volume has rotated out of the best-performing stocks of the year and into some of the laggards, but LPL Research analyst Jeffrey Buchbinder said Monday there are several reasons why value stocks’ time in the sun may be short-lived.

5 Reasons Growth Stocks Are Still King

Buchbinder said the impressive breadth of the stock market’s rally off of March lows is encouraging for investors and suggests stocks are still a better bet than bonds overall for the remainder of 2020 and in the long-term. However, he listed at least five reasons it’s unlikely value stocks will continue to beat out growth stocks as the economy recovers:

If you think you’re a financial genius because you bought the rally on March 23rd (the bottom of the COVID crash, and incidentally, the day UK lockdown was announced), then you either arbitraged how Central Banks and Governments were going to press the MAX POWER button to juice the market through QE Infinity (QEI), bailouts and nationalising payrolls, (in which case, well done), or you were just a lucky idiot who bought into all the nonsense hype about an oversold opportunity.

Do you perhaps think the liquidity Central Bank have pumped into the market might be related to recent stock and bond gains? (Clue: Yes.)

· The Fed’s balance sheet has expanded by over $3 trillion since March. Stock Market capitalisation has increased by …. about the same amount. $2.9 trillion. And bond market investors found another $1 trillion to put into the busiest corporate new issue market of all time because they saw it was backstopped by QEI and rates were going lower. Thank you Fed! Full Story

Wall Street’s main indexes fell on Friday as investors were on edge ahead of a U.S. response to China’s national security law on Hong Kong that threatens to take the shine off another month of strong gains for the stock market.

President Donald Trump, who has warned of a tough response to China’s move, is expected to make an announcement later in the day.

Adding to the downbeat mood, economic data showed U.S. consumer spending suffered another month of record decline in April, buttressing expectations that the economy could contract in the second quarter at its steepest pace since the Great Depression. Full story here

Amazon.com, Inc. is in late-stage talks to acquire Zoox, a budding robo-taxi service. Zoox’s hardware and software assets could be a boon for Amazon, but a bane for automotive players fighting to retain market share.

Morgan Stanley analysts led by Adam Jonas maintained an Overweight rating on Amazon with a $2,600 price target.

How Amazon Could Become A Threat

Zoox positions Amazon to expand its total addressable market with food-delivery and ride-sharing services.

“AMZN’s innovation focus, capital to invest, and leading shipping volumes (and the miles driven along with them) make it one of the few companies that could build a product to compete with Waymo, Uber, Lyft and others,” Jonas wrote in a note.

Zoox’s capabilities would also position Amazon to rival automotive companies…CLICK for complete article