Bulletin
Investor Alert

London Markets Open in:

Need to Know Archives | Email alerts

Aug. 12, 2021, 9:58 a.m. EDT

Hold onto those value stocks because the Wall Street stampede into defensive names is about to turn, says Citi

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Dow Jones Industrial Average (DJIA)
  • X
    S&P 500 Index (SPX)
  • X
    U.S. 10 Year Treasury Note (TMUBMUSD10Y)

or Cancel Already have a watchlist? Log In

By Barbara Kollmeyer

Following back-to-back records on Wall Street, the summer doldrums seem on tap for Thursday, with the week’s big inflation data now tucked away.

Those highs come as investors veer toward the perceived safety of defensive stocks, concerned that the highly contagious delta variant of COVID-19 will curb economic activity. The Nasdaq Composite is trailing the Dow /zigman2/quotes/210598065/realtime DJIA +0.15% and S&P 500 /zigman2/quotes/210599714/realtime SPX -0.81% for the week and month.

They may be cautious for now, but the herd may be about to turn, says our call of the day from a team of Citi analysts led by Hong Li.

“With the 10-year yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -0.18% expected to recover to 2% by the end of the year, according to our U.S. rates strategy team, we do not think that the cautious rotation can be sustained much longer and expect crowds to move toward more economic-sensitive sectors and value to outperform again,” said Li and the team. That yield inched toward 1.8% this year before backing off, but has been creeping up again in recent weeks.

Citi analysts say technology,, led by semiconductor and software stocks, remains the most crowded sector, even if performance has been so-so lately, while utilities and consumer staples continue to be the least crowded, despite an outperformance in July.

“Conventional thinking is to avoid buying crowded stocks (high crowding composite), as they may become harder to attract marginal investors, while stocks that are less crowded are prone to react more positively to fundamental catalysts, as they can attract a larger set of new investors,” said the Citi team. But they caution that the crowding composite is just one of many factors that should be considered when making an investment.

As for which stocks have seen the least crowding, AT&T /zigman2/quotes/203165245/composite T +2.03% , Gilead Sciences /zigman2/quotes/210293917/composite GILD +1.08% , Dollar Tree /zigman2/quotes/203712248/composite DLTR +0.16% , Kellogg /zigman2/quotes/209631250/composite K +2.89% and Edison International /zigman2/quotes/206923834/composite EIX +2.45% are the top five . The most crowded bunch includes Adobe Systems /zigman2/quotes/200389143/composite ADBE -2.05% , Nike /zigman2/quotes/203439053/composite NKE -1.23% , Thermo Fisher Scientific /zigman2/quotes/201150432/composite TMO -1.15% , Snap /zigman2/quotes/205087158/composite SNAP -43.08% and Zoetis /zigman2/quotes/207603157/composite ZTS +0.03% at the top.

The markets

Stocks /zigman2/quotes/210598065/realtime DJIA +0.15% /zigman2/quotes/210599714/realtime SPX -0.81% /zigman2/quotes/210598365/realtime COMP -2.35% are mixed after a batch of data, while Europe equities /zigman2/quotes/210599654/delayed XX:SXXP -1.14% are just hanging onto a record streak of gains. Asian stocks were in the red, with China’s CSI 300 /zigman2/quotes/210598128/delayed XX:000300 +0.26% down 0.8% amid those prospects for more regulation. Oil prices /zigman2/quotes/209723049/delayed CL00 +0.76% are slipping after the International Energy Agency and  the Organization of the Petroleum Exporting Countries  expressed worries over demand growth.

A mixed bag of data and China cracks down again

U.S. initial jobless claims dipped 12,000 in the latest week, while producer prices for July rose a bigger-than-expected 1%.

Shares of Baidu /zigman2/quotes/209050136/composite BIDU -6.67% are slipping after the Chinese multinational technology group beat on profit and revenue, but its outlook disappointed . And Nio /zigman2/quotes/204905836/composite NIO -8.56% is up after the U.S.-listed Chinese electric-car maker reported a narrower-than-expected quarterly loss . Results from Mouse House Disney /zigman2/quotes/203410047/composite DIS -4.01% and online lodging marketplace Airbnb /zigman2/quotes/222990650/composite ABNB -6.21% are due after the close.

Speaking of China, the government has rolled out a five-year plan pushing for more business regulation, with a focus on national security, technology and monopolies.

The Food and Drug Administration is reportedly set to authorize a third dose of the COVID-19 vaccine for those with weakened immune systems as soon as Thursday.

While Florida’s governor has banned mask mandates in schools, California will require teachers and staff to get vaccinated or face weekly COVID-19 testing, becoming the first state to do so.

Hackers have returned some of the $611 million they stole in a crypto heist of DeFi platform Poly Networks. They are apparently seeking rewards in the form of donations.

As lockdowns have fueled demand for sex toys, two closely held European companies are set to merge in a $1.2 billion deal.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
31,928.62
+48.38 +0.15%
Volume: 382.95M
May 24, 2022 4:55p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,941.48
-32.27 -0.81%
Volume: 2.44B
May 24, 2022 4:55p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
2.76
-0.0049 -0.18%
Volume: 0.00
May 25, 2022 2:08a
loading...
/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 21.16
+0.42 +2.03%
Volume: 49.84M
May 24, 2022 4:03p
P/E Ratio
8.94
Dividend Yield
5.25%
Market Cap
$148.48 billion
Rev. per Employee
$803,103
loading...
/zigman2/quotes/210293917/composite
US : U.S.: Nasdaq
$ 64.35
+0.69 +1.08%
Volume: 8.26M
May 24, 2022 4:00p
P/E Ratio
17.98
Dividend Yield
4.54%
Market Cap
$79.85 billion
Rev. per Employee
$1.91M
loading...
/zigman2/quotes/203712248/composite
US : U.S.: Nasdaq
$ 130.20
+0.21 +0.16%
Volume: 2.46M
May 24, 2022 4:00p
P/E Ratio
22.47
Dividend Yield
N/A
Market Cap
$29.26 billion
Rev. per Employee
$125,003
loading...
/zigman2/quotes/209631250/composite
US : U.S.: NYSE
$ 70.45
+1.98 +2.89%
Volume: 2.40M
May 24, 2022 4:00p
P/E Ratio
15.67
Dividend Yield
3.29%
Market Cap
$23.24 billion
Rev. per Employee
$460,323
loading...
/zigman2/quotes/206923834/composite
US : U.S.: NYSE
$ 68.08
+1.63 +2.45%
Volume: 1.25M
May 24, 2022 4:00p
P/E Ratio
44.44
Dividend Yield
4.11%
Market Cap
$25.33 billion
Rev. per Employee
$1.22M
loading...
/zigman2/quotes/200389143/composite
US : U.S.: Nasdaq
$ 398.41
-8.35 -2.05%
Volume: 2.63M
May 24, 2022 4:00p
P/E Ratio
39.55
Dividend Yield
N/A
Market Cap
$192.19 billion
Rev. per Employee
$620,748
loading...
/zigman2/quotes/203439053/composite
US : U.S.: NYSE
$ 107.29
-1.34 -1.23%
Volume: 6.02M
May 24, 2022 4:00p
P/E Ratio
28.35
Dividend Yield
1.14%
Market Cap
$170.96 billion
Rev. per Employee
$639,754
loading...
/zigman2/quotes/201150432/composite
US : U.S.: NYSE
$ 548.82
-6.39 -1.15%
Volume: 1.01M
May 24, 2022 4:00p
P/E Ratio
28.61
Dividend Yield
0.22%
Market Cap
$217.34 billion
Rev. per Employee
$316,331
loading...
/zigman2/quotes/205087158/composite
US : U.S.: NYSE
$ 12.79
-9.68 -43.08%
Volume: 286.48M
May 24, 2022 4:02p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$36.77 billion
Rev. per Employee
$779,048
loading...
/zigman2/quotes/207603157/composite
US : U.S.: NYSE
$ 163.05
+0.05 +0.03%
Volume: 1.69M
May 24, 2022 4:04p
P/E Ratio
37.42
Dividend Yield
0.80%
Market Cap
$76.71 billion
Rev. per Employee
$652,149
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
31,928.62
+48.38 +0.15%
Volume: 382.95M
May 24, 2022 4:55p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,941.48
-32.27 -0.81%
Volume: 2.44B
May 24, 2022 4:55p
loading...
/zigman2/quotes/210598365/realtime
US : Nasdaq
11,264.45
-270.83 -2.35%
Volume: 4.03M
May 24, 2022 5:16p
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
431.58
-4.96 -1.14%
Volume: 0.00
May 24, 2022 11:03p
loading...
/zigman2/quotes/210598128/delayed
XX : China Securities Index
3,969.43
+10.27 +0.26%
Volume: 7.90B
May 25, 2022 1:52p
loading...
/zigman2/quotes/209723049/delayed
US : U.S.: Nymex
$ 110.60
+0.83 +0.76%
Volume: 17,422
May 25, 2022 1:58a
loading...
/zigman2/quotes/209050136/composite
US : U.S.: Nasdaq
$ 115.73
-8.27 -6.67%
Volume: 3.15M
May 24, 2022 4:00p
P/E Ratio
25.51
Dividend Yield
N/A
Market Cap
$44.32 billion
Rev. per Employee
$424,245
loading...
/zigman2/quotes/204905836/composite
US : U.S.: NYSE
$ 14.63
-1.37 -8.56%
Volume: 48.41M
May 24, 2022 4:04p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$28.23 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203410047/composite
US : U.S.: NYSE
$ 101.59
-4.24 -4.01%
Volume: 13.97M
May 24, 2022 4:03p
P/E Ratio
70.04
Dividend Yield
0.00%
Market Cap
$192.68 billion
Rev. per Employee
$408,500
loading...
/zigman2/quotes/222990650/composite
US : U.S.: Nasdaq
$ 106.24
-7.04 -6.21%
Volume: 6.42M
May 24, 2022 4:00p
P/E Ratio
91.44
Dividend Yield
N/A
Market Cap
$72.10 billion
Rev. per Employee
$1.08M
loading...
1 2
This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.