Barclays' Investment Outlook

Summary: Barclays (LON:BARC) strategists prefer Growth over Value stocks in the US but are positive on Value in Europe, as trends shift post-elections.

US Market Summary

• Growth vs. Value: Growth stocks have outperformed Value over the past week, contrary to post-election trends.
• Rationale: Strong fundamentals and Big Tech's dominance support Growth in the US, with valuations deemed attractive.

European Market Summary

• Value Stocks: Barclays shows a positive outlook on Value stocks in Europe, citing attractive valuations and historical election-related rallies.
• Future Expectations: Anticipated reinflationary policies could aid Value stocks in a potential Trump second term.

Downgrades and Neutral Stance

• Barclays adopted a neutral stance on US Growth stocks, downgrading Yield from neutral to negative.
• Neutral strategy applies to Momentum and Quality in the US and Europe, with potential near-term correction risks.
• Quality stocks in the US downgraded due to weaker balance sheets and unfavorable historical returns post-elections.

Size Preferences

• US Market: Preference for large-cap stocks due to better Quality exposure and growth metrics over small caps.
• European Market: Positive outlook on small caps, benefitting from low valuations and historical recovery post-elections.

Volatility Adjustments

• High-volatility stocks in the US received an upgrade from negative to neutral as investors pivot to riskier assets post-election.
• Defensive Low Volatility stocks in Europe remain at a negative stance, aligned with market dynamics following US elections.