Topic Tags: International Equity - Developed

2023 Market Preview Video

This video is a recording of a live webinar held January 19 by Marquette’s research team, featuring in-depth analysis of the final months of 2022 and a look ahead at risks and opportunities to monitor in the year ahead. Our Market Insights series examines the primary asset classes we cover for clients including the U.S. economy, fixed income, U.S. and non-U.S. equities, hedge funds, real estate, infrastructure, private equity, and private credit, with presentations by our research analysts and directors.

Download > 2023 Market Preview Report with 100+ additional charts and data, organized by asset class

Read > 2023 Market Preview: Trail Guide to 2023 Asset Class Performance

 

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An Investor’s Holiday Wish List

Hopefully not another year of coal
In the spirit of holiday fun — and an effort to put 2022 investment returns behind us — we have put together our investor wish list for 2023. We have broken the wish list into two categories: the “must-haves,” which carry the most weight and are most observable, and the “stocking stuffers,” which may not be headline grabbers but are nonetheless impactful across economies and markets. Predictably, the “must-have” items focus on a reversal of the major trends that drove the markets this year; we “must have” a better outlook across at least some of these topics. The “stocking stuffers” category is a variety of topics that either directly impact the major trends from 2022 or are more targeted with their impact on specific asset classes. And while we recognize this is not an exhaustive list, we feel strongly that if these wishes come true we can all feel better about market returns in 2023.

This year’s must-haves:

  • Lower inflation
  • Less aggressive Fed policy leads to fewer interest rate hikes in 2023
  • Avoid a deep recession
  • Resolution of geopolitical conflicts

And stocking stuffers:

  • Broad-based earnings in the U.S. stock market
  • A weaker U.S. dollar
  • Credit defaults start to flatline
  • Slowdowns in hiring and wage growth
  • Favorable news out of China
  • History repeats itself

Read > An Investor’s Holiday Wish List

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

International Equities: Waitin’ on a Sunny Day

In recent years, international stocks have underperformed their domestic counterparts by a significant margin. Specifically, the MSCI ACWI ex-US index has compounded annual returns at just 3.3% over the last decade through the end of October, compared to an annualized return of 12.8% for the S&P 500 index. This current stretch marks the longest period of relative outperformance on a trailing 5-year basis for either index since the early 2000s.

This newsletter examines a host of factors that have contributed to this pattern of performance, including differences in composition between U.S. and international equity indices, currency movements, and geopolitics and analyzes the diversification benefits of international equity allocations within portfolios despite performance challenges.

Read > International Equities: Waitin’ on a Sunny Day

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Q3 2022 Market Insights Video

This video is a recording of a live webinar held October 27th by Marquette’s research team, featuring in-depth analysis of the third quarter of 2022 and risks and opportunities to monitor in the coming months.

Our Market Insights series examines the primary asset classes we cover for clients including the U.S. economy, fixed income, U.S. and non-U.S. equities, hedge funds, real estate, infrastructure, private equity, and private credit, with presentations by our research analysts and directors.

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Livestream Videos: 2022 Investment Symposium

The presentations by our research team from Marquette’s 2022 Investment Symposium livestream on September 23rd are now available. Please feel free to reach out to any of the presenters should you have any questions.

View each talk in the player above — use the upper-right list icon to access a specific presentation.

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. Past performance is not indicative of future results. For full disclosure information, please refer to the end of each presentation. Marquette is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Marquette including our investment strategies, fees and objectives can be found in our ADV Part 2, which is available upon request.

Halftime Market Outlook: A Mixed Bag

Last week, we hosted our “Halftime” Market Insights Webinar. As the host, my job was to introduce the analyst for each section and then summarize his or her comments before moving to the next speaker. After the fourth section, I found myself using the term “mixed bag” for the third time; it was at that moment that I knew I had my title for this letter!

Of course, “mixed bag” is an overused and unoriginal cliché to describe a perspective that features both positive and negative elements. If we focus solely on the first half of the year, it is hard to find much good news at all between negative economic growth, historically high inflation, and hefty losses in both the equity and bond markets. Even the good news is rooted in how bad things are…after all, how much longer can inflation stay above 9%? Could the equity market REALLY drop another 20% the second half of the year? Alas, our “mixed bag” descriptor admittedly relies on the assumption that conditions should improve at least somewhat for the remainder of the year, though likely not enough to reverse the damage inflicted during the first half. On an absolute and relative basis, growth and return figures should be better, but it is naïve to think that all of the bad news is behind us.

In this edition:

  • Inflation expectations
  • Consumer and business sentiment
  • The S&P 500’s worst six-month start to a year since 1970
  • Recession probability
  • The Agg’s worst start to a year ever
  • Bonds go back to being bonds

Read > Halftime Market Outlook: A Mixed Bag

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

2022 Halftime Market Insights Video

This video is a recording of a live webinar held July 20th by Marquette’s research team, featuring in-depth analysis of the first half of 2022 and risks and opportunities to monitor in the coming months.

Our Market Insights series examines the primary asset classes we cover for clients including the U.S. economy, fixed income, U.S. and non-U.S. equities, hedge funds, real estate, infrastructure, private equity, and private credit, with presentations by our research analysts and directors.

Sign up for research alerts to be notified when we publish new videos and invited to future webinars.
For more information, questions, or feedback, please send us an email.

Global Equities Still Well Above COVID Lows

Just over two years ago, on March 23rd, 2020, global equities hit their COVID-19-induced bottom. At their lows, the S&P 500, MSCI Emerging Markets Index, and MSCI EAFE Index were down 30%, 32%, and 33%, respectively, year-to-date. Over the next seven quarters, global equities produced mostly positive returns, with the S&P 500 leading the way. From the 2020 trough, the large-cap U.S. index was up an astounding 119% through the end of 2021.

This year, markets have faced several geopolitical and macroeconomic concerns that have squashed that positive momentum. Russia’s invasion of Ukraine in February and China’s rise in COVID-19 cases combined with its zero-COVID policy have worsened supply chain issues, exacerbated global inflation, and added to mounting economic pressures. To combat inflation, central banks have aggressively raised interest rates, which will likely further dampen economic activity. As a result of these headwinds, the S&P 500, MSCI EM, and MSCI EAFE benchmarks are all down roughly 17–19% year-to-date.¹ Despite these losses, global equities remain well above the COVID-19 trough, with non-U.S. equities still roughly 40+% higher and the S&P 500 77% higher. Looking forward, we expect global equities — particularly in developed countries — to face continued volatility in the second half of the year as central banks continue their fight against inflation, likely at the expense of economic growth.

Print PDF > Global Equities Still Well Above COVID Lows

¹As of June 29, 2022

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Flirting With a Bear Market: How Did We Get Here, and What Comes Next?

Quite simply, this has been the worst start to a year since the 1930s:

  • One of only 19 quarters since 1976 when both bonds and stocks posted negative returns;
  • One of only six of those quarters when bonds have underperformed stocks;
  • The worst four-month return for the S&P 500 since 1939.

2022 to date has featured a myriad of macroeconomic factors coming to a head: inflation at its highest level since the 1980s, the Federal Reserve responding with aggressive rate hikes, and increasing concerns about the health of the consumer leading to a possible recession. An evolving pandemic, a war in Eastern Europe, and draconian lockdown policies in the world’s second-largest economy and largest manufacturing hub have further added to the problem and complicated the solution. With these macro headwinds and uncertainties driving markets year-to-date, Marquette’s fixed income, U.S. equities, and non-U.S. equities teams discuss the impacts on their asset classes and weigh in on the outlook from here.

Read > Flirting With a Bear Market: How Did We Get Here and What Comes Next?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Lockdowns Lead to Slowdown

COVID cases have been on the rise in China over the last ten weeks, surpassing February 2020 highs by 800%. The seven-day rolling average has moved from 110 new cases at the end of January 2022 to a high of 30,500 on April 21st. Since the beginning of the pandemic, China has operated with a zero-COVID policy, combining testing and tracing with the use of lockdowns to prevent the spread of the virus. These measures have resulted in an extremely low case count compared to the rest of the world. The country’s recent high near 30,000 is still well below the U.S. seven-day average peak of 800,000 in January 2022.

China’s aggressive use of lockdowns to control the spread of the virus has impacted the country’s economic activity. March’s Purchasing Managers Index (PMI) reading was 48.8, below the neutral 50 mark, indicating a contraction in economic activity. Several Chinese cities are feeling the pressures of the recent lockdown, including Shanghai, a key finance and manufacturing hub. Many investors expect Chinese authorities to step in with supportive policies to help the country navigate the current downturn. Ultimately, however, China may need to choose between two of its seemingly opposing agenda items — its zero-COVID policy and its 5.5% target growth rate — with the choice likely to have material implications for equity markets for the rest of 2022.

Print PDF > Lockdowns Lead to Slowdown

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.