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.

January 2022

Regional Assessments

In the Atlas quantitative assessment of equity regions as of January 2022, Canada is most favorably positioned, while international small cap is at the bottom. The overall ranking top to bottom is:

  1. Canada
  2. Europe
  3. Asia/Pacific
  4. Emerging Markets
  5. United States
  6. International Small Cap

January 2022

US Sector Ranking

The Atlas assessment of US sectors favors the following:

  • Energy
  • Consumer Staples
  • Financials

These US equity markets have the lowest ranking:

  • Small Cap
  • Communication Services
  • Consumer Discretionary

January 2022

Asia/Pacific Country Ranking

In the Asia/Pacific region, only Japan has a high enough ranking to merit an overweight in client portfolios. We have neutral or underweight positioning in the other equity markets, which are influenced by the slowdown in China.

January 2022

European Country Ranking

As mentioned above, Europe is the most favored large region among global equities. As a consequence, Atlas would tilt towards higher than benchmark weights for half of the European countries. The four countries with the highest overall ranking in Europe are:

  1. Austria
  2. Israel
  3. United Kingdom
  4. Norway

The least favored European equity markets are Netherlands, Ireland, Denmark and Finland.

January 2022

Emerging Market Country Ranking

As mentioned above, Emerging Markets have a low ranking among global equities, weighed down by difficulties in China, the largest Emerging Market. The four best-positioned Emerging Markets are:

  1. South Africa
  2. Mexico
  3. Brazil
  4. Taiwan

China has the lowest favorability score of all the equity indices ranked by Atlas. Other Emerging Markets where Atlas is underweight for clients include Russia, Malaysia and Thailand.

Equity Market Downside Risk Dashboard

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

View Economy Dashboard

Have a question for
Atlas Capital Advisors?

Our approach is based on research and unique to your wealth management needs. We have the experience for individuals or an institution.

Contact Us