Globe editors have posted this research report with permission of Rosenberg Research. This should not be construed as an endorsement of the report’s recommendations. For more on The Globe’s disclaimers please read here.
Summary of this report:
Despite the recent sell-off, our message is the same for equity investors: focus on ex.-U.S. exposure where valuations are more favorable.
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As such, we remain underweight on the U.S. equity market, although there was a notable upgrade to our model’s score this month.
According to our duration model, the recent up-move in Treasury yields is overdone, leading to a counter-consensus overweight call.
Conversely, our U.S. dollar model is quite bearish, suggesting a declining profile over the next year, particularly against the Japanese yen and, to a lesser extent, the euro.
In our monthly theme, we look at the challenging start to 2022, and how the most expensive stocks have fared the worst.
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Our research strongly suggests that investors should be focused on parts of the equity market that have retained earnings visibility in this period of heightened uncertainty and have the most alluring valuation support.
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