”We expect equity markets to take a breather after the recent all time highs. We look for opportunities beyond the mega caps and in emerging markets.”
- 18 of the 23 biggest Equity markets have hit all time highs in the first half of this year.
- A resilient economic outlook and expectations of rate cuts should support a broadening of the rally.
- Emerging markets and global companies outside the expensive mega caps may be in favour later in the year.
In the first half of the year, the world’s largest equity markets have reached new all time highs. This includes 33 out of the 47 countries in the MSCI World All Country Index of both developed and emerging markets. Several factors have contributed to this rally, such as expectations of interest rate cuts, a resilient and improving economic outlook, and solid corporate earnings.
While in the first half of the year, the rally has been heavily concentrated, particularly in the US, for the second part of the year we expect a broadening of the rally that should favour companies outside the mega caps and in Emerging Markets. In particular, different speeds in regional economic growth may potentially offer opportunities in companies with not too expensive valuations and strong business models.
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