IN FOCUS6-8 min read

Schroders Equity Lens February 2024: your go-to guide to global equity markets

Performance in rate cutting cycles, cracks in concentrated markets, an emerging market earnings revival, and everything else you need to know about global equity markets this month.

08/02/2024
Equity lens photo
Read full reportSchroders Equity Lens February 2024
44 pages

Authors

Duncan Lamont, CFA
Head of Strategic Research, Schroders

Summary:

  • Stocks have returned 11% above inflation in the 12-months after the Federal Reserve (“Fed”) starts cutting rates, on average – based on analysis of 22 rate cutting cycles since 1928 (slides 5 and 6 and read more).

  • Average returns have been better if a recession is avoided but good even if one has not. Stocks have beaten bonds and have obliterated cash, on average (slides 5 and 6).

  • The Magnificent-7 are up 89% since start of 2023, the rest of the world 17%. They make up more of MSCI ACWI than Japan, UK, China, France, and now Canada too, combined (slides 7-8).

  • But this masks cracks among the seven. They are not a homogenous group in terms of their businesses or share price performance. Three of the seven have underperformed the rest of the market since September (slide 9)

  • Deviating from the market has been a winning strategy when concentration has been high (slide 10 and read more)

  • EM earnings are forecast to accelerate 18% this year: will this revive stock market returns? (slide 18)

    Click here to download your February copy

    Chart of the month:

EN

Read full reportSchroders Equity Lens February 2024
44 pages

Authors

Duncan Lamont, CFA
Head of Strategic Research, Schroders

Topics

Follow us

Please note past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This marketing material is for professional clients only. This site is not suitable for retail clients.

For illustrative purposes only and does not constitute a recommendation to invest in the above-mentioned security / sector / country.

Cazenove Capital is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 2020 and the Protection of Investors (Bailiwick of Guernsey) Law 2020, as amended in the conduct of banking and investment business. Registered address at Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3UF (No.24546). Schroders (C.I.) Limited, Jersey Branch is regulated by the Jersey Financial Services Commission in the conduct of investment business. Registered address at IFC1, Esplanade, St Helier, Jersey, JE2 3BX, (No.31076).