The worst first half since 2008
Jul 01, 2022
For most developed equity markets, this first 6 months were the worst first half of any year since the great financial crisis in 2008. This is also true for Europe where all sectors except energy were strongly in the red. The reasons are well identified: higher commodity prices, more restrictive central banks with higher rates, concerns over a recession and the disruptions caused by the Ukrainian war. Markets look oversold in the short run and the current pessimism could form the basis of a rebound. While there are indeed investment opportunities at the current valuations, we caution however that earnings estimates overall are still at record highs and will face a reality check at the upcoming Q2 result season. At ECP, we are therefore invested in undervalued quality businesses with strong moats.