While the current sell-off is in line with previous major bear markets of the postwar period, it is extreme in its speed and volatility. Precedent would suggest that markets will remain under pressure for the immediate future, but unless you assume we are on the verge of a 1930s’ style bust, equities are poised for…
The near-term outlook for emerging markets equities is not very compelling; should shares continue to fall sharply, investors will need to reassess their desired tactical allocation.
Despite moving into the fair value range, European equities are not attractive at this time.
Despite low valuations, U.S. financial stocks will likely remain a “value trap” until greater clarity emerges as to the ultimate magnitude of losses facing the financial system.
A closer look at “quality” equities across developed markets reaffirms our view that high-quality equities remain attractive and portfolios should remain tilted toward mega-cap growth.
While markets may rally over the coming months, the hurricane of deleveraging is far from over, with a second wave of turmoil likely as a weakening U.S. economy weighs on growth in the rest of the world, a scenario still not fully priced into equity markets.
A look at what history tells us to expect as the earnings, business, and stock market cycles converge.
2008 may prove to be a particularly dangerous year, as slowing U.S. and global growth force a turning of the profit and credit-default cycle, the consequences of which equity markets are not well prepared for.
While the long-term case for emerging markets equities remains intact, now is not the time to overweight emerging markets equities as soaring valuations and a blind faith in “decoupling” leave them quite vulnerable in the near term.
While the U.S. dollar may be poised for a short-term rebound, the long-term direction for the U.S. dollar is down, as emerging markets untether themselves from the greenback.