Value stocks offer bargains outside AI and IPOs

PARAGRAPH 1 --- Value stocks have been outperforming the broader market, with mid-cap and small-cap value stocks leading the S&P 500 year-to-date. The iShares Russell 1000 Value ETF has gained about 15%. Specific stocks like MetLife (MET) and Macy's (M) are being highlighted for their value, with MetLife launching a new product and Macy's showing positive sales growth. Bill Ackman's focus on quality names like Microsoft (MSFT) and Seth Klarman's purchases of value stocks like DNOW Inc. (DNOW) further underscore this trend.

PARAGRAPH 2 --- This shift towards value stocks is driven by investors seeking bargains outside the overhyped AI and IPO sectors. The recent slowdown in tech-led growth and high valuations have made value stocks more attractive. Companies like Microsoft and Netflix (NFLX), which have pulled back from their highs, are now seen as bargains. Defensive stocks with stable business demand and reliable dividends, such as those in the utilities sector, are also gaining traction.

PARAGRAPH 3 --- Next, investors should watch Microsoft's earnings report scheduled for July 19. This will provide insight into the company's performance and validate its status as a value play. Additionally, the market will be closely watching the Federal Reserve's interest rate decision on July 27. A change in monetary policy could impact the valuation of growth stocks and further drive investors towards value stocks. Lastly, the performance of the iShares Russell 1000 Value ETF will continue to be a barometer for the overall value stock narrative.