Equities

The collapse of the Silicon Valley Bank, the 16th largest bank in the United States, triggered a shockwave through financial markets. Despite their resilience, European equity markets nevertheless also had to give away some ground in this environment. During this correction, and especially since the beginning of March, growth stocks outperformed value stocks, and large caps outperformed small caps.

Portfolios managed by Candriam have no exposure to any Credit Suisse security, OTC exposure or stock-lending exposure.

The year of 2022 proved to be one of the most challenging and volatile for emerging market (EM) equities.

European equity markets made a very strong start to the year, supported by easing inflation figures, both in the US and Europe, the surprisingly quick end to the zero-Covid policy in China and the relatively mild winter that has defused the energy crisis in Europe and thus the risk of a deep winter recession.

And we would rather not have to go through this – which would mean we won the battle and cancer is curable.

Despite a fairly significant rally beginning in October, European equity markets, battered by major outflows since the start of the crisis in Ukraine, recorded a correction over the year 2022 (-9.5%). Although European equities finished the year on a relative outperformance compared with the United States (-13.4%) and emerging markets (-15.1%)1, the year was still a source of concern for investors, who are now asking questions about what may arise in 2023.

European equity markets registered a significant rebound from the previous month. This was mainly driven by China’s decision to ease its zero COVID-19 policy.

After a slightly hesitant start, European stock markets continued their recovery from the October lows and ended November well into the green.

European equities have rebounded over the past four weeks. The rebound was mainly driven by value stocks that have outperformed growth stocks since the last Equity Committee.

European equities closed September lower. In Europe, the energy crisis continued to dominate the headlines, as Russia completely halted gas flows through the key Nord Stream 1 pipeline at the beginning of the month.

Central banks’ commitment to bringing inflation under control, despite the inherent risks to the growth outlook, shook both equity and bond markets in August. While the summer brought historical droughts and heatwaves to many parts of the world, the global economy nevertheless continued to cool. All in all, the level of uncertainty about the outlook for the global economy remains high. This uncertainty is especially elevated in Europe, where after six months of war in Ukraine, there is no sign of a ceasefire, and where a recession seems increasingly likely this winter as the region’s energy crisis continues to intensify.

Global equity markets further corrected in June, delivering the worst first half-year returns in over 50 years (for developed markets).

25 years of experience in ESG, 25 years of experience in Emerging Markets Equities, and over 15 years of putting it all together. Doubling the Drivers of Performance : Historically, Emerging Markets have been the drivers of global growth. Times are changing - deglobalisation is the new trend – but EMs still are responsible for more than half of our global economic growth.

Since the beginning of the year, the European market – like its peers - has suffered a severe correction. Market participants are watching out for the low point, the green light that will allow the market to reposition itself for the long term.

Global equity markets stabilised somewhat in May after the significant correction since the beginning of the year. However, there are not a lot of new elements to digest. The Fed walked the talk and increased its rates.

The first quarter of the year was difficult for investors and April proved no different. The war in Ukraine, lockdowns in China and the prospect of substantially tighter US monetary policy all weighed on sentiment.

Global equity markets had a difficult start to the year due to inflation and interest rate fears, and the Russian invasion in Ukraine, that has resulted in a spike of both energy and raw material prices. Unfortunately, also climate-related investments haven’t been spared from the global market turmoil.

At the beginning of 2022, economic activity returned to its pre-pandemic level and the omicron wave had less of an impact on activity than previous ones.

For the second month in a row, global equity markets suffered. In the first half of February, investors were mainly focused on the pace of rate increases in the US and Europe.

Starting in record territory at the beginning of January, the global stock market corrected aggressively in tandem with rising interest rates.

As expected, the rise in long yields has speared a strong style rotation – see our article published in November 2021. Investor appetite for value stocks, coupled with significant profit-taking on growth stocks, has led to “value” companies outperforming their “growth” peers by almost 12% in January 2022So where are we now? And is “value” becoming “overvalued”?

In Europe, an unreliable supply of Russian gas, falling investments in thermal energy and maintenance work on nuclear power plants led to a sharp rise in gas and electricity prices across the continent before they fell in December. Higher energy prices are fuelling the rise in inflation in the region.

Index investing continues its “unstoppable” rise and is expected to overtake active investing by 2026 at the latest, according to Bloomberg. This trend can be utilised by some equity market neutral strategies to generate returns uncorrelated either to bonds or equities.

JPMorgan’s CEO, Jamie Dimon, had to issue a long public apology for his "joke" during a recent trip to Hong Kong.