News and Research
Early indications show that global inflation eased due to tighter financial conditions. Commodities reversed early year gains, supporting the fading inflation narrative. Value stocks extended their outperformance over growth stocks.
In this paper, we share thoughts on SGA’s strategies and approach, and why we are more excited today than at any time in recent memory. Our conclusion is that if one believes the type of companies our process identifies makes sense – higher quality, consistent growers trading at relatively attractive valuations – we believe there has rarely been a time where the cost of owning such characteristics is more attractive than today.
Global stocks declined on increasing concerns of a more severe global economic downturn. The global growth outlook was revised lower with Europe particularly vulnerable. Market volatility has increased but also creates new opportunities to deploy capital.
Global stocks declined in the second quarter as the macroeconomic outlook worsened. Renewed lockdowns emerged in China while the Russia-Ukraine conflict continued unabated. The World Bank revised downward its 2022 global growth forecasts from 4.1% to 2.9%.
Following three years of double-digit returns, global equity markets declined in the first quarter as market volatility and geopolitical risks increased. Policy makers must now balance combating inflation with maintaining positive economic momentum and global economic growth estimates have started to shift lower.
Global equity markets delivered a third consecutive year of double digit returns in 2021. The OECD expects global GDP growth to moderate to 4.5% in 2022 which is still above long term trends. SGA sees many opportunities in equities today but anticipates volatility into 2022.
The New Year is a time to reset, examine the past and, more importantly, to assess the future with a clear mind and a blank sheet of paper. In this paper we look beyond SGA’s own investment strategies to set a broader stage for thinking about the best way forward in 2022 and beyond.
Global equity market returns were modestly negative in the third quarter as volatility increased. The Delta variant led to a resurgence in global COVID-19 cases while economic data was mixed. We view stimulus tapering programs as a sign of confidence that the global recovery remains on track.
Global equity markets were resilient in the second quarter as inoculation efforts were productive. Global stocks performed well, and market leadership rotated between value and growth. Earnings growth and strong company fundamentals will likely be supportive of global equities.
Major equity market returns were overall positive in the first quarter with notable outperformance in value over growth, as rising fixed income yields posed a risk to elevated equity valuations. Moving forward, we expect a gradual shift towards normalcy in many developed regions, as an increasing supply of vaccines coupled with sizeable fiscal stimulus plans may lead to a surge in global economic growth.