John Linehan Opinion: The new bull market will be led by stocks in these three industries. Tech and the FAANGs will fall to the wayside

“There is still this belief that once we get through this angst about the economy, we will get back to the market we had in the past decade where growth and tech will do well,” says Linehan.
That’s probably not going to be the case, he says, for two reasons.
1. Inflation will be much higher for longer, thanks, in part, to reshoring, which reduces the downward pressure on prices we’ve enjoyed from globalization.
This will bring persistently higher interest rates, which favors value stocks over growth. Higher interest rates hurt “long duration assets” such as technology and FAANGs. A lot of their earnings come in the distant future. Those earnings are worth less today when discounted back from the future by higher rates.
2. Competitors cropped up to challenge the high-profile tech companies. This will be a headwind.
In with the new
To find the groups that will lead the next bull market, look among the value sectors, which do better than growth when interest rates are higher. Another reason is they have been left for dead, says Linehan. The discount that value carries relative to growth is bigger than it has been nearly 90% of the time in the past 40 years.
Then look for good fundamentals. This leads us to three groups that will likely lead the next bull market.
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