• 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,
Indonesia GDP

 

8 Feb

RBI monetary policy,
Mexico CPI

 

9 Feb

China money supply, Italy
Industrial production

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.

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