Equities in the Spotlight: A Look Ahead to 2023

# Emerging and U.S. Equity Markets: A Discussion on Opportunities and Misconceptions

Welcome to this session on emerging and U.S. equity markets, brought to you by Allspring Global Investments. Joining us today are Allison Shimada, Senior Portfolio Manager for Global Emerging Markets, and Bryant VanCronkhite, Senior Portfolio Manager for Special Global Equity. In this discussion, we will explore the current state of these markets and how investors can capitalize on the factors influencing them throughout 2023.

**Understanding the Impact of Monetary Policy**

Disagreements over monetary policy and a lack of understanding of its impact on equity markets may appear to be challenges for investors. However, both situations create opportunities. In this video, Allison and Bryant delve into the intricacies of monetary policy and its effects on emerging and U.S. equity markets. By gaining insights into these factors, investors can make informed decisions.

**Analyzing Market Volatility and the Fed’s Influence**

The year 2022 has been marked by significant volatility in the markets. Bryant discusses how the markets have been reacting to the Federal Reserve’s actions, particularly their focus on combating inflation and raising interest rates. This continuous back-and-forth between the Fed’s actions and market behavior has created a macro-driven market, resulting in increased volatility.

However, Bryant suggests that it’s time to consider a new perspective. He questions whether we are entering a new paradigm where the Fed’s traditional methods may no longer be effective. He proposes the idea of a “higher for longer” mindset, questioning how this shift would impact asset allocation and stock selection.

**Examining Emerging Markets and the Prospect for Rate Cuts**

Allison offers her perspective on emerging markets. She highlights that many countries, including emerging markets, have already started increasing interest rates earlier than the United States. Looking ahead, she predicts that rate cuts may occur in the second half or early 2024. As the world moves towards normalization and experiences increased GDP growth, there is a renewed focus on the unique dynamics of emerging markets.

**Challenging Misconceptions and Rethinking Investment Strategies**

Bryant addresses the common misconceptions when it comes to investing in the current market environment. He believes that one of the key mistakes investors make is relying on the Fed’s generosity to support asset prices. Instead, he emphasizes the importance of active investment strategies that focus on businesses with unique demand drivers and the ability to control their own destiny.

While acknowledging the past success of passive investments, Bryant suggests that active investment strategies provide more predictable outcomes over time. By actively managing portfolios and considering emotions, investors can navigate the challenges that emotions can pose to their investment success.

Join Allison Shimada, Bryant VanCronkhite, and our moderator, JJ Ramberg, for this insightful discussion on emerging and U.S. equity markets. Don’t forget to participate in the poll and submit your questions in the chat.

[Source: [Allspring Global Investments][1]]

[1]:

SPONSORED AND PROGRAMMED BY ALLSPRING

Disagreement over monetary policy and misunderstanding of the impact on the equity markets might seem like a problem for investors. In fact, both create opportunity. A discussion about the state of both emerging and U.S. equity markets and ways to capitalize on what’s influencing them now and through the rest of 2023.

Alison Shimada, Allspring Global Investments Senior Portfolio Manager, Global Emerging Markets
Bryant VanCronkhite CFA, CPA, Allspring Global Investments Senior Portfolio Manager, Special Global Equity
Moderator: JJ Ramberg, Financial Journalist