Insights

Scale of the drawdown in global equities in 2022 has produced a significant de-rating with US equites experiencing one of the largest PE contractions

The FT Wilshire 5000 has experienced a technical bear market in 2022 (defined as at least a -20% drawdown)

The rapid reversal in risk appetite in Q3 has produced a retest of the June lows

A key feature of 2022 has been the sustained strength of the US dollar

Hawkish Fed guidance sends FT Wilshire 5000 into reverse gear in August

Markets have been gripped by risk aversion since mid-August

After a period of relative stability, we are starting to see a deterioration in the EPS or profit cycle through the prism of estimate trail analysis

Equities are a long duration asset class and returns should be viewed via the prism of long-time horizons

Following a record-breaking decline in the first half of 2022, markets have staged a recovery led by the US.

US consumer durables, technology and retail have led the re-rating of the US market since mid-June

The first half of 2022 witnessed a significant correction to the FT Wilshire 5000 index taking the index back to levels last seen in early 2021

2022 has witnessed a large rotation in both factor and style indices