Fynsa
The U.S. financial sector has lagged behind, despite a host of positive signs: loan growth, rising profits, and a historic release of regulatory capital. This divergence between price and fundamentals is precisely where the opportunity lies.
The software sector has suffered the largest non-recessionary decline relative to the market. But according to market consensus estimates, the sector's fundamentals remain largely intact.
Outperformance relative to DM (Developed Markets) is expected to continue through 2026. Emerging markets currently offer diversification in the artificial intelligence sector, from concentration in the US to exposure to Asian AI.
Equity markets continue to struggle between higher interest rates and positive corporate earnings dynamics, associated with the strength of the economy but, above all, the potential of AI.
No correction has been observed so far in the equity market, despite technical indicators that the market is overbought and at all-time highs.
And suddenly, interest rates are important again.
We recommend a more balanced portfolio to address the high concentration in the market.
Higher interest rates put pressure on valuations during 2022, but the focus will now shift from valuations to corporate earnings in an increasingly challenging macro environment.
