CAPE: European Value Stocks Still Cheap Relative To Growth

One of the unintended side effects of this week’s Federal Open Market Committee meeting is that value stocks are set to outperform growth, according to research from Barclays analysts Dennis Jose, Ian Scott and Joao Toniato. They’ve noticed that the relative performance between growth and value has depended largely on changes in the yield curve, so the Fed’s mostly bullish tone should put damper on growth stories.

“In our view, the Fed’s change of opinion regarding the path of interest rates, from the March to the April FOMC meetings, was the culprit for the volatility in the performance of investment styles seen year-to-date. We believe this is because interest rates are the key driver of the performance of...