Following a 23% rally in the US equity market from November 2011 to April 2012, the past concerns over the European sovereign debt crisis and wobbling US economic recovery have come back to haunt us.
Post the April market highs the market has corrected with a classical sector rotation. Telecommunications, utilities and consumer staples stocks have outperformed while industrial, basic material and financial stocks have underperformed the market. This leaves the S&P 500 trading at 12.3x forward earnings vs a median of greater than 15 times over the past ten years. The financial crisis of 2008 has left US investors with heightened sensitivity to any form of a systemic threat to the banking sector. This history indicates that financial problems are larger than first anticipated with the...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
