- Global equity markets are close to flat over the past month with a rotation in equity styles from growth to value and from cyclicals to defensives, broadly in line with rising bond yields globally. Energy stocks continue to rebound driven by the ongoing supply side issues with crude oil prices now trading at their highest levels since 2014.
- The decoupling between the US equity markets and the rest of the world has been quite stark so far this year, and is likely to narrow going forward given a catch up in macro-economic momentum, a more attractive relative value proposition and a reversal in investor sentiment.
- We have upgraded our view on euro zone equities to neutral. Macro signals have bottomed out and are rolling over, relative earnings revisions have improved, while the movement in the euro should provide some relief to exporters. Sentiment appears to have bottomed out for the region and global investor positioning appears to be very light.
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