Summary
- Resilient economic growth in the US so far has been driving equity markets, but some areas of the market now look stretched.
- However, weakening US consumption and subdued economic activity in Europe reflect some key risks for corporate profitability.
- Thus companies beyond mega caps or in other regions (Japan for example) could offer opportunities.
Key Dates
5 Feb EZ PMI, US PMI, |
8 Feb |
9 Feb China money supply, Italy |
Actionable Ideas
- Look beyond the mega caps in US market
US mega cap and technology stocks appear overvalued. But if we look beyond this universe, in areas such as equal-weighted and US value, we may identify attractively-priced businesses.
- Global equities
Regions such as Asia are showing a divergence from the weak global growth narrative. Global investors may enlarge their opportunity set, including Europe and Japan.