While equity markets are feeling the pinch from rising real rates, earnings reports and guidance are yet to reflect the effects of the encroaching recession. This leaves markets vulnerable to a downside correction once the message sinks in.
Listen to this Talking heads podcast in which Nadia Grant, head of global equities, discusses the outlook with chief market strategist Daniel Morris. She expects a correction in the high single to low double digits. She advocates defensive positioning with a focus on higher-quality markets such as the US, less economically sensitive sectors, innovative pharmaceuticals and IT secular growth themes.
You can also listen and subscribe to Talking heads on YouTube.
Talking heads brings you insights on topics that matter to investors, analysis of the world and financial markets, and conversations with our investment experts, all through the lens of sustainability.
Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience.
Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice.
The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.
Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).
Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.