FNArena’s Weekly Insights – March 06 2023
In this week’s Weekly Insights:
-February Trends, Winners, Signals & Losers
-Advice From The Best: Klarman & Buffett
-Research To Download
By Rudi Filapek-Vandyck, Editor
It is often said that investing in the share market, ultimately, comes down to corporate earnings – where earnings go, share prices must follow.
This narrative, however, covers only 50% (at best) of what moves and guides share prices. The other half are forecasts and expectations, which in large part are guided by macroeconomic prospects and events.
The first two months of calendar year 2023 stand out through a marked discrepancy between the two major forces that drive equities and general risk appetite.
On one hand, there’s optimism to be had from a resurgent China and the fact most countries seem to have avoided the worst from what looked like an unavoidable energy crisis. On the other hand, companies are clearly struggling with headwinds and slowing momentum, and only a brave soul would call the end of the impact from central bank tightening today.
The macro versus micro divergence has turned February into the proverbial cold shower that brought back some realism into what appeared a lot of exuberance that previously underpinned January’s strong rally. February’s negative performance was never going to be solely about corporate hits and misses, of course, with global bond markets and evolving inflation forecasts equally making an impact.
But February wasn’t great………
