The Dividend Cafe Tuesday - November 18, 2025
Nov 18, 2025
Recent market declines have prompted a significant shift from growth to value stocks, with major indices reflecting this trend. The labor market is cooling, as evidenced by ADP data, while mixed signals emerge from the housing market, where builder confidence contrasts with lowering prices. Amid economic data delays, Fed officials remain focused on inflation, reducing prospects for a December rate cut. Additionally, useful financial terminology, such as revenue multiples and PE ratios, is explored to shed light on current market valuations.
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Example Of Extreme Market Concentration
- Brian illustrates concentration risk by comparing one company's market cap to several entire S&P sectors combined.
- He uses that example to explain why high-valuation names are being sold off and value is rising.
Rotation From Growth Into Value
- Markets are rotating from high-valuation growth names into value and defensive stocks.
- One huge company now commands a disproportionate share of S&P valuation, which is fueling the shift.
Data Gaps Mask Economic Picture
- Economic releases remain patchy because many reports were delayed after the government shutdown.
- Partial indicators like ADP show the labor market is cooling over recent weeks.