Current Market Assessment

Which Equity Markets are Favored?

For equity regions, countries and sectors, we combine information into comprehensive charts to help you understand what parts of the global equity market are better positioned for future returns and which are poorly positioned. The results of our quantitative assessments of global equity choices are illustrated in the charts below.

On all charts, the horizontal axis is Value, measuring the relationship of price to fundamental information such as earnings, sales, and cash flow. Equity markets which are farther to the right have better Value. The vertical dimension on the chart is Momentum, a measurement of the recent price performance for the equity index. The markets which are higher up in the chart have better Momentum. While the Atlas process uses other criteria in addition to Value and Momentum, those two are the most important. The markets in the upper right quadrant on the charts (if any) are most favorably positioned for future returns. We call that quadrant the “Comfort Zone”. Those in the lower left are least favorably positioned, in the “Danger Zone”. The size of the circles in the chart represent the market capitalization of the equity index and the color represents Atlas’ current positioning – green for overweight, yellow for neutral weight and red for underweight.

August 2023

Regional Assessments

In the Atlas Capital quantitative assessment of equity regions as of August 2023, international stocks are favored over the US. We are particularly tilted toward Europe and Japan. Atlas is tilted away from the US stock market because both valuation and momentum are negative relative to non-US markets.

August 2023

US Sector Ranking

InfoTech would have a favorable ranking based on very strong price momentum. However, Atlas has decided to be at neutral weight because of unattractive valuation. Clients have tilts toward the following sectors:

  • Communication Services
  • Consumer Discretionary
  • Energy
  • Industrials

These five US equity markets have the lowest ranking and therefore underweight positions for clients:

  • Utilities
  • Real Estate
  • Financials
  • Consumer Staples
  • Health Care

August 2023

Asia/Pacific Country Ranking

In Asia/Pacific we are tilted toward Japan and slightly toward Korea while tilting away from Hong Kong.

August 2023

European Country Ranking

The four countries with the highest overall ranking in Europe are:

  1. Italy
  2. Spain
  3. Denmark
  4. Austria

The least favored European equity markets are Sweden, Netherlands, Finland and Belgium.

August 2023

Emerging Market Country Ranking

The Emerging Market region has a wide dispersion of favorability. The four best-positioned Emerging Markets are:

  1. Frontier
  2. Turkey
  3. Poland
  4. Chile

Clients are underweight China, Thailand, Malaysia, India. South Africa and the Philippines. Russia is not investable at this point and is not shown on the chart.

Equity Market Downside Risk Dashboard

Click here for our latest assessment of the downside risk faced by equity investors.

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