Seeking Alpha

The S&P 500 (SPY) is fairly valued, says Goldman, but opportunity lies in cyclicals (XLY,...

The S&P 500 (SPY) is fairly valued, says Goldman, but opportunity lies in cyclicals (XLY, XLE, XLI, XLB) which are more undervalued vs. defensives (XLU, XLP, XLV, XTL) than at any time in the last 15 years. "Given the 4 P/E multiple point head start, even a slight valuation normalization should translate into outperformance of cyclicals over defensives during the next 12 months."
Comments (1)
  • Widest spread in 15 years? But long term interest rates are the lowest in 70 years. It all depends on future growth whether the spread narrows or not. I agree at some point the multiple spread between the cyclical and non-cyclicals will narrow, and there could even be a short term correction. But whether it's a lasting trade or a short term phenomenon is debatable.
    6 May 2013, 07:48 AM Reply Like
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