Value equities have historically shown resiliency during higher inflationary periods versus their growth counterparts. Given that the current period of higher core inflation may last longer than expected, value opportunities continue to be an option to consider for portfolio diversification and potential stability.
“Sticky” core services persist
Inflation currently remains more elevated than it was over a year ago, although it has receded through October. Our view is that inflation will remain above target with 2% likely being the floor. We think price pressures continue in the pipeline, particularly in core goods. Core services remain sticky but with less labor demand, lower wage growth should contain further upward pressure.
Value beyond tech
While equity markets continue to be highly concentrated in more growth oriented companies, with tech leading much of that momentum, we believe attractive valuations can be found in other sectors like energy and financials.
In financials, we believe large banks like Bank of America and JP Morgan can offer opportunities through diversified lines of business where deregulation and buybacks or dividends are tailwinds for the sector. In energy, we see attractive supply-demand dynamics in oil, gas and refineries, such as Exxon, Phillips 66 and Marathon Petroleum.
For a deeper dive into various sectors and investment strategies, see the latest Monthly Checkpoints.
This is an extract from Checkpoints, a comprehensive monthly chartbook that provides insights into major themes affecting financial markets. For additional analysis, read the full report.
* Chart illustrates a sample of sectors; for the full display, see the latest Monthly Checkpoints. Charts are provided for illustrative purposes and are not indicative of future results. Performance quoted represents past performance which is no guarantee of future results.
The price-to-earnings (P/E) ratio measures a company’s share price relative to its earnings per share (EPS).
The S&P 500 Index is designed to track the performance of the largest 500 U.S. companies. An investor cannot invest directly in an index.
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GU-751 – 2 November 2026
