value underperforming growth, similarity w/ tech bubble end of 90s

thanks to social media, aapl and goog sucking all available capitals in an unregulated market controlled by discriminate distribution of advertisng revenues through monpolistic manipulation of digital technology

“Value” stocks have underperformed in Q2’11 by 7.1%. The size of this move is greater than any other time since at least 2005. Furthermore, in July this trend dramatically accelerated, with Value underperforming by as much as 6.3% at the worst point last week. If this pace of underperformance continued for the whole quarter, it would amount to 28%, which is multiples greater than seen in any other quarter since ’05 and comparable only to Q4’99, the eye of the Tech Bubble.
At sector level, we note a significant ytd outperformance of Autos, by 12% vs the market. Our analyst believes that Q2 results will be robust for the sector, but we think this is widely anticipated, and in the near term Autos appear overowned, overbought and running out of positive catalysts. We take profits in Autos, moving from OW to N. We see this as a tactical downgrade given that the fundamentals of the sector remain resilient in our view.
 We would use the funds to add to Banks and to other Cyclicals, in particular Construction Materials, which we upgrade to OW. The subsector has underperformed ytd and is attractively priced. Our analyst notes challenging US construction market, but we think a lot has been discounted already. JPM economists expect EM activity, which accounts for 2/3rds of sector revenues, to pick-up in 2H.
 In terms of our market outlook we continue to believe that a bullish stance will prevail, despite high volatility and elevated tail risks. We find investors do not want to commit because they fear the repeat of ’08, but in our view it is exactly because people remember ’08 that one should be invested now. Recent newsflow suggests policymakers arelikely to stumble towards a solution and 35% of MSCI Europe names are trading below 10x forward P/E. We think Financials have to perform in the event of market stabilisation