A trader smokes a cigarette outside the New York Stock Exchange in the Manhattan borough of New York City, two days after the 2020 U.S. presidential election, New York, U.S., November 5, 2020.
Carlo Allegri | Reuters
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For value investors waiting for a grand rotation after the election, they might end up disappointed yet again.
Many on Wall Street were betting on a revival of value stocks on the belief that a potentially “blue wave” could help approve a massive fiscal spending package that benefits cheap names whose rebound depends on a broad economic turnaround.
However, the odds of a unified government have waned with both of Georgia’s Senate races going to January runoffs. A divided Congress could restrict the incoming Biden administration’s ability to pass large-scale fiscal stimulus, hurting value stock’s chances to outperform their growth counterparts, Wall Street strategists said.