Commentary
Last week was rather calm yet rewarding for global equity markets. All major US indices closed the week in green, while European benchmarks mostly rallied as well. Performance was rather broad-based, with only small-cap value stocks being noticeable underperformers.
Fixed income markets were also stable throughout the week, with yields on most benchmark contracts remaining largely unchanged. The only exception was yield on 2-year US treasuries, which increased by 50bps to 4.96%.
At this point, it is worth mentioning the unique performance of markets in 2023. While S&P 500 has gained over 19% YTD, almost 95% of these gains came from the 7 best performing stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. Meanwhile, the remaining of S&P 500 rose by a mere 3.5%. From valuations perspective, this means that most of the index constituents still have room to grow, especially now that the macroeconomic headwinds are gradually neutralizing.
