Historically, geopolitical crises have provided reasonable entry points for long-term equity investors.
As the Federal Reserve facilitates tighter monetary policy, and the cycle matures, our view is that investors should consider moving up in quality (we prefer U.S. Large and Mid Cap Equities) and reducing cyclicality.
We anticipate earnings growth will experience challenges as operating margins fall while interest, labor, and input expenses rise.
Amid the volatile market conditions we prefer U.S. equities over international equities. We also favor increased emphasis on quality over cyclicals in our sector positioning, and selectivity at the subindustry level.
International equity markets face competing forces that ultimately keep us less favorable compared with U.S. equities for the balance of 2022 and through 2023.
A strong U.S. dollar will likely be a headwind for international markets overall. A recession in Europe is expected to weigh on developed-market returns. Meanwhile, slowing global and Chinese economic growth as well as higher interest rates in the U.S. and other developed markets should be a drag on emerging-market returns.
Wells Fargo Investment Institute (WFII)
Individual Market Charts For use With; Clients and Prospects
INSTRUCTIONS ON ASSEMBLING AN INDIVIDUAL MARKET CHART PRESENTATION
The first page of the presentation must be the Market Chartbook Cover page (Market Charts: Turning Data into Knowledge) which includes the retail non-deposit investment product (RNDIP)/Not, No, May disclosure. Chartbook data is updated quarterly. Please check the effective date on the Cover page to be sure you are assembling the most recent information available. In Digital Market Charts, this is automatically added as the opening page of any collection you create.
The final page must be the General Disclosure page which identifies Global Investment Strategy as a division of WFII and Wells Fargo Advisors as the broker-dealer. In Digital Market Charts, this is automatically added as the closing page of any collection you create.
In between the Cover and the General Disclosures pages you may include any individual chart(s) you decide upon. If a chart contains a separate disclosure page, that page will automatically accompany the particular chart chosen. For example, if you wish to include the Fixed Income Scorecard as one of your selected charts, it will automatically be accompanied by the disclosures on the following page.
After assembling, submit to your Qualified Supervisor for review and approval in compliance with the Communication Compliance Submission process as outlined in your LOB’s CAR Guide. Slides used without alteration and with the proper disclosures need Qualified Supervisor review. They don’t need to go through CAR.
If printed, the chart slides must be printed one per page to ensure that disclosures on the slides are legible. These pre-approved slides may not be altered in any way or combined onto a single slide.