Schroders Equity Lens December 2022: your go-to guide to global equity markets
Our regular analysis highlights the charts and data that matter to equity investors.
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What’s been driving stock prices? Are they currently expensive or cheap? And which regions and sectors are poised to do well next?
These are some of the questions we aim to answer in our monthly publication – the Schroders Equity Lens, a compilation of key trends in global equities illustrated through thought-provoking charts.
Click here to download your December copy.
Summary
Global equities advanced strongly in November. The MSCI World index gained 7.0%, reducing the year-to-date decline to -10.9% (in US dollars). UK equities remain the top performing market this year (slide 12).
Companies remain preoccupied by the risk of a recession. This can be measured via analysis of company transcripts (slide 6).
The recent market rally may prove premature if a recession does materialise. Typically, returns are negative in the first six months of a recession and strengthen towards the end (slide 7).
Our research shows that “false dawns” occur in most deep bear markets. Rallies of 10% or more are not uncommon before the market bottoms out (slide 8).
Despite the rally of the past two months, several markets still look cheap relative to their own history. But they may not be cheap enough given the weak economic outlook. US valuations are still expensive (slide 9).
Schroders’ analysis shows that ESG scores are biased against small cap companies. These inefficiencies are a return opportunity for active small cap investors (slide 10).
Learn more about investing in Schroder Global Emerging Markets Fund.
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