- The War in Ukraine has created significant uncertainty in the markets. Since the start of the conflict close to 50 companies have postponed or canceled their planned IPO, global M&A has dropped 15%, and global bond issuance has fallen by 14%.
- Over the past decade growth investing has far outperformed value investing. The S&P 1500 Composite Growth Index had an annual return of 16.4% versus 11.9% for the S&P 1500 Composite Value Index over the same time period. However, this year value seems to be the winner, only dropping -0.2% compared to -8.6% for the growth index.
- Between February 2019 and February 2022 the growth in home prices outpaced income growth of Americans in 82% of US real estate markets. Given the fact that the supply of homes for sale with a price below $500K has dropped 74% over that same time period, it is likely that young millennials will continue to struggle to buy their first home at an affordable price.
- Five years ago both the S&P500 and the S&P500’s high-dividend yield stocks (ticker: SPYD) traded for around 18x forward earnings. Today the S&P500 trades for 20x while the index’s high yield constituents trade for 13x and provide a yield of 3.8%. Since many high-yield companies are in the energy and defensive sectors some investors are looking to add exposure.
Bloomberg – A Hundred Firms Pull $45 Billion of Deals Since War in Ukraine
WSJ – Value Investing Is Back. But How Do You Choose the Right ETF
Barrons – First-Time Home Buyers Are Simply Walking Away: “We’ve Been backed Into a Corner”
Barrons – Missed the Dip in Stocks? Where ti Find Yields of 3% to 6%
Economic Calendar
Monday: Factory orders (Feb), Core capital equipment orders (Feb)
Tuesday: Foreign trade deficit (Feb), S&P Global (Markit) services PMI (Mar), ISM services index (Mar)
Wednesday: FOMC minutes
Thursday: Consumer credit (Feb)
Friday: Wholesale inventories (Feb)
