Credit Suisse Says The August Equity Rout Is No Surprise, Saw Bearish Sentiment Build Rapidly W/ Institutions & Traders Since July
Credit Suisse noted large caps sold-off more than mid caps and this may be driven by greater relative China exposure along with valuations incorporating a greater premium. HC Equipment & Services and Pharma/Biotech remain overvalued. Credit Suisse data shows Semiconductors held up the best and this backs up the call from Citigroup to seek exposure to semiconductors for the near-term.
Follow the link below for a chart of past events and the percent pullback generated:
Finally, Credit Suisse noted small/large cap relative returns have been in the area of 6 percent in the 12-months following these types of pullbacks and that small caps remain more attractive vs large caps for the coming year.
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