“The risk here seems greatest for value stocks, where valuations are now at 40-year highs, banking on a reflationary boom to bail them out. If the economic data starts to fade and the earnings impact of the Trump policy agenda gets diluted, then the medium-term outperformance of growth stocks would intensify.”
Broomer added: “You see it year in, year out, expectations go from good to really quite glum and this can happen quite quickly. Markets can start off optimistic at the beginning of the year but then correct by the summer.
