Last week the Bull predicted that the difference in performance between growth and value stocks had become so large that a change in relative performance was likely. He even said it might happen soon. Over the past few years, there have been several false starts in that oft predicted rotation. Last week, it appeared this shift was indeed happening, but it is too early to say whether this is yet another attempt that fails or the beginning of a new trend.

The Bull further hypothesized that this change could come about either of two ways. Growth stocks could radically correct or they could stall while value stocks played catchup. The latter would be preferable for most investors. Last week saw some outperformance by many value names slightly closing the gap to growth.

For steady progress on this front, investors may need more confidence in the reopening and recovery by the economy. The latest news on new Covid-19 infections is not encouraging. Perhaps the recovery is stalling as more drastic health measures are taken. Consumer confidence could also be wavering.

This may mean that not only value stocks could again languish but perhaps even the entire market. Much has improved since the March lows in the stock market. With more government aid, many small businesses should see their lifelines extended. So, a massive correction seems unlikely. However, a summer pause may be in order; stay steady, my friends.

Sincerely, Scott C. Wohlers