Insights

In terms of assessing the status of the ‘Profit Cycle’ as a market driver there are multiple dimensions that can be applied to this analysis

A recent look at the extreme concentration in the US equity market, expressed as the wide gap between the performance of the FT Wilshire 5000 index (distorted by contribution of the Magnificent Seven stocks) compared to performance of the Equal weighted index.

A key feature of US equity market performance over the last couple of years has been the increasing dependence on the returns delivered by a handful of stocks, raising concerns about the degree of concentration.

Macro economic backdrop has been supportive of risk appetite

The FT Wilshire GLIO (Global Listed Infrastructure Organisation) Listed Infrastructure Indexes provide exposure to global companies which own and/or are operators of infrastructure assets

2023 was a disappointing year in terms of EPS growth.US equities only delivered +2.3% growth while the World ex US saw a decline of -4.2%.

On the back of surprisingly robust growth in 2023, both consensus forecasts and the Federal Reserve have been upgrading expectations for 2024.

Japanese Equities have continued to power ahead delivering a 13% return YTD through to the end of February

The continued surge in Nvidia and other AI related stocks is posing a question about US equity valuation status

The rally in US equities over the last 3 months (+16.4%) was partly a function of growing confidence in peak rates and anticipation of an easing cycle

The FT Wilshire 5000 26.1% return in 2023 was driven by 2 large up-legs

The FT Wilshire 5000 delivered a 26.1% return in 2023