On the face of it, the market appears to have turned defensive in July, but our style data shows the market is still anchored around beta, mid-caps, financial leverage, yield, capex, and momentum. These style changes have gained traction and are now visible in long-term charts. In the most recent month, what institutions are buying seem to be the market's favorite money-making tool. At the same time, debt-equity, 200 DMA deviation, beta and dividend yield continued to occupy the top spots as the best factors for picking stocks.
The market is arguing for a new growth cycle, also evident in India's relative performance, investor positioning, relative valuations to EM equities and local bonds, investment styles that are generating returns, and flows into India. Incremental data suggests that the cycle is recovery, probably a bit faster than the few months consensus was expecting.
