Institutional Investing / Market Outlook

Q1 2023 Global Markets Review & Outlook

Global equities rose 7.3% in Q1, bringing MSCI ACWI Index returns to 18.4% since last October’s low. Emerging Markets (EM) also performed well, returning 4.0% in the quarter. Market movement is increasingly looking like the new bull market we have described previously, with the backdrop unfolding, as we would expect. As always, volatility is possible and we cannot rule out the possibility of more downside. However, this rally looks ever more like a classic early bull market, leading us to believe 2023 will be a positive year for global markets.

Inside, you will find a summary of market activity and our market outlook.

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  • A New Bull Market is Near or Underway: While volatility in any sector or region can temporarily impair returns, we believe a new bull market cycle is imminent.
  • Excessive Investor Fear Supports New Bull: Universally dour sentiment, driven by concerns on inflation, labor markets, energy crunches, the Russia-Ukraine war, banking sector uncertainty and a variety of other factors has significantly lowered investor expectations, creating space for the new bull market to grow.
  • US President’s Third Year is a Tailwind for Global Markets: The third year of a US president’s term historically has the highest frequency of positive returns of the four-year cycle. S&P 500 returns have been positive 91.7% of the time since 1925. No third year was negative since 1939, in the Great Depression’s depths, which is nothing like today.

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