Market Navigation Reports

Monthly multi-asset Market Navigation research reports to help investment decision
formulation, covering global markets performance and market drivers and trends

Global Markets Performance - January 31, 2024

+1.1%

RETURN of the FT Wilshire 5000 in JanuarY 2024

+16.4%

3M REtuRn of the FT Wilshire 5000

-10.7%

Decline in China Equities in January 2024 (USD)

+1.9%

Rise in DXY dollar index in January 2024
US Market Performance
Data as of :
January 31, 2024

FT Wilshire 5000 loses momentum as Fed dampens optimism over rate cut in March

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FT Wilshire 5000 loses momentum as Fed dampens optimism over rate cut in March
US Sector Performance
Data as of :
January 31, 2024

Technology and digital info sectors remain the main drivers of returns, Real estate and transportation reverse course in January

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Technology and digital info sectors remain the main drivers of returns, Real estate and transportation reverse course in January
Source: Wilshire Indexes. Data as of January 31, 2024

FT Wilshire 5000 loses momentum as Fed dampens optimism over rate cut in March

Data as of :
January 31, 2024

Having hit new all-time on the 29th January the FT Wilshire 5000 lost momentum month-end as the Fed cools optimism over a March rate cut.

Technology and digital information sectors continue to drive FT Wilshire 5000 returns.

Wide dispersion of returns within US technology sector as semiconductors spike higher.

FT Wilshire US Large Cap vs Small Cap since December 31, 2022
FT Wilshire US Large Cap vs Small Cap since December 31, 2022
Following a 26.1% return (22.1% real) in 2023 the FT Wilshire 5000, posted a modest 1.1% return in January. The index has seen annualized returns of 13.8% and 12.2% over 5 and 10 years, respectively. Despite the strong return in 2023 the index has only seen a 0.1% real annualized return over 2 years.
Following a 26.1% return (22.1% real) in 2023 the FT Wilshire 5000, posted a modest 1.1% return in January. The index has seen annualized returns of 13.8% and 12.2% over 5 and 10 years, respectively. Despite the strong return in 2023 the index has only seen a 0.1% real annualized return over 2 years.
Source: Wilshire Indexes. Data as of January 31, 2024

Technology and digital info sectors remain the main drivers of returns, Real estate and transportation reverse course in January

Data as of :
January 31, 2024

Technology and digital information posted positive returns in January and have delivered the strongest returns over three months. Transportation and real estate reversed course, underperforming in January.

Technology and digital information remain the largest contributors to returns over one and three months.

Source: Wilshire Indexes. Data as of January 31, 2024

Growth’s outperformance relative to Value widens further. Small cap lose momentum in early 2024.

Data as of :
January 31, 2024

Growth has continued to outperform Value. Small cap has marginally outperformed large cap over three months but saw negative returns in January.

Growth sees a 5yr annualized return of 17.9% vs 10.7% for value.

Long term returns (USD, TR %)
Long term returns (USD, TR %)
Size and style index returns since December 31, 2022 (USD, TR %)
Size and style index returns since December 31, 2022 (USD, TR %)
Growth/Value outperformance theme continues. Large Cap regains momentum relative to Small Cap.
Growth/Value outperformance theme continues. Large Cap regains momentum relative to Small Cap.
Source: Wilshire Indexes. Data as of January 31, 2024

Quality/Value factor performance continues to diverge from the Growth/Value style return profile - strong start for Momentum in 2024

Data as of :
January 31, 2024

Our “Pure Factors” are designed to eliminate the unintended sector and factor exposures incorporated into most conventional factor methodologies. In this regard they are designed to deliver “pure” factor premia.

Pure Momentum outperforms in January with Size and Quality the laggards.

Pure Value has outperformed Quality over three months. Beta has underperformed.

Significantly different return profiles delivered by Pure Factors compared to their respective Style indexes.
Significantly different return profiles delivered by Pure Factors compared to their respective Style indexes.
Source: Wilshire Indexes. Data as of January 31, 2024

+15.3%

3M Returns of Global Equities (USD, TR) 

-10.7%

Decline in Chinese equities IN January (USD, TR) 

+17.4%

3M Return of Japanese Equities (USD, TR) 

+8.7%

GLOBAL EQUITY 10-year annualized return (USD, TR) 
GEMS Market Performance
Data as of :
January 31, 2024

Global equity market rally loses momentum in late January

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Global equity market rally loses momentum in late January
Global Sector Performance
Data as of :
January 31, 2024

US tech and digital info theme continues into the new year

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US tech and digital info theme continues into the new year
Source: Wilshire Indexes. Data as of January 31, 2024

Global equity market rally loses momentum in late January

Data as of :
January 31, 2024

The global equity rally lost some momentum in January. Japan (in USD terms) has outperformed, China sees further significant declines.

Wide dispersion of returns within Emerging markets with India and Taiwan pulling ahead whilst China significantly underperforms.

In USD terms the US has delivered the strongest returns over 10 years. Europe ex UK has outperformed the UK. China has fallen back dramatically from its high in January 2021.

Regional Returns - Short Term (USD, TR, %)
Regional Returns - Short Term (USD, TR, %)
Regional Returns - Long Term (USD, TR, %)
Regional Returns - Long Term (USD, TR, %)
Double-digit returns over 3 months for most markets. China sees further large declines in January.
Source: Wilshire Indexes. Data as of January 31, 2024
Double-digit returns over 3 months for most markets. China sees further large declines in January.
Double-digit returns over 3 months for most markets. China sees further large declines in January.
Source: Wilshire Indexes. Data as of January 31, 2024

US tech and digital info theme continues into the new year

Data as of :
January 31, 2024

Larger positive US digital info and tech contributions more than offset the larger relative drag from transportation in January.

Consumer goods continues to act as a drag on China returns.

US (light blue bars) digital info, health care and tech outperformed in January. US transportation significantly underperformed Global ex US peers (dark blue bars).

US Digital info, health care and technology the top performers in January
US Digital info, health care and technology the top performers in January
Digital information contributed 0.9% of the 1.2% US return in January
Digital information contributed 0.9% of the 1.2% US return in January
Source: Wilshire Indexes. Data as of January 31, 2024

10-year yields have risen since the start of the year but US yields still well below the 5% highs hit in October 2023

Data as of :
January 31, 2024
Source: Wilshire Indexes. Data as of January 31, 2024

Commodity, digital asset, REITS and absolute return asset categories

Data as of :
January 31, 2024

A further escalation of the conflict in the middle east has fueled supply concerns, driving the oil price higher since the start of the year. Despite the conflict the price of oil is still well below its 2023 high reached on 27 September. After a strong Q4 (+11.2%) gold has eased back, driven in part by the modest rise in real yields since the start of the year.

Both US and non-US REITs were hit by the pick up in bond yields in January with the Wilshire Global ex US index underperforming the US. REITs have still seen strong three month returns. Wilshire Liquid Alternative indexes posted gains in January against a backdrop of increased volatility in equity markets.

The FT Wilshire Digital Assets Index lost some momentum in January falling –0.2%. The index has still seen double-digit gains of 27% over the last three months.
The FT Wilshire Digital Assets Index lost some momentum in January falling –0.2%. The index has still seen double-digit gains of 27% over the last three months.
Source: Wilshire Indexes. Data as of January 31, 2024

FT Wilshire Market Drivers - February 2024

Further upgrades to 2024 US GDP forecasts risk the potential for a 2023-style higher for longer redux

Data as of :
February 19, 2024

Whilst most regions outside the US have seen downgrades to consensus 2024 GDP forecasts (most notably the Eurozone and China), the US has seen growth forecasts rachet higher over the last six months.

Despite the latest US CPI reading coming in above expectation there remains uniformity in view that inflation will return towards (the upper-end of) pre-Covid levels by the end of 2024. China has recently slipped further into outright deflation.

Recent strong economic data has led to further upgrades to consensus US 2024 GDP forecasts
GDP  Forecasts as of January 2024
Growing divergence between consensus US and China 2024 GDP forecasts
Regional rolling 12M forward consensus GDP
Further disinflation expected in 2024, albeit at a slower rate than 2023
Consensus and Central Bank CPI Forecasts
Measures of US inflation (YoY% chg)
Measures of US inflation (YoY% chg)
Source: Wilshire Indexes, LSEG Datastream, FactSet, Federal Reserve, BoE and ECB. Data as of February 19, 2024.
No items found.

Growth’s outperformance relative to Value widens further. Small cap lose momentum in early 2024.

Data as of :
January 31, 2024

Growth has continued to outperform Value. Small cap has marginally outperformed large cap over three months but saw negative returns in January.

Growth sees a 5yr annualized return of 17.9% vs 10.7% for value.

Markets reassess the outlook for US rates as the Fed pours cold water over market expectations of imminent rate cuts

Data as of :
February 19, 2024

At its recent meeting the Fed further dampened market expectations over the timing and tempo of US rate cuts in 2024. A reassessment of US interest rate expectations has also spread to other major regions.

Markets are now pricing in c75bps of US rate cuts in 2024, down from c125bps at the start of the year.

Market year-end 2024 US rate expectations are now more in line with the Fed’s projections
Regional Interest Rate Expectations (%) January 2024
Markets have pushed out the timing of the first US rate cut from March to June
Regional Real effective exchange rates January 2024
Regional Financial Conditions Indicators (FCI) (1-5 based on Z-Scores)
Shifts in US financial conditions have been a key driver of risk appetite over the past year
Drivers of restrictive US financial conditions January 2024
Source: Wilshire Indexes, LSEG Datastream, FactSet, Federal Reserve, BoE and ECB.  Data as of February 19, 2024.

US PEs still below previous highs but AI trade has pushed US valuations to levels that are now flashing amber

Data as of :
February 19, 2024

The recent rally drove the US 12-month forward PE back above 20 in late January for just the second time since April 2022.

The US cyclically-adjusted PE (CAPE) currently sits at 29.5x, below the highs of the TMT bubble but well-above its 10-year average. Both the US CAPE and 12m forward PE are at levels that are now flashing amber.

The US 12m forward PE risen above 20x once again but remains below all-time highs
Regional 12M Forward PE Comparison January 2024
Regional 12 month forward PE ratios
Historical 12M Forward PE Ratios
Regional Valuation Metrics - Absolute vs 10-Year Average
Regional Valuation Summary January 2024
Source: Wilshire Indexes, Refinitiv, FactSet and LSEG Datastream. Data as of February 19, 2023.

Strong rebound in US EPS growth expected this year but the earnings pulse looks less healthy without support from the tech sector

Data as of :
February 19, 2024

We have seen a modest decline in US 2024 EPS growth forecasts on the back of Q4 earnings season but a big rebound in EPS growth is still expected this year following just 2.3% growth in 2023.

The progression of US 2024 EPS estimates looks less healthy when we exclude technology. 2024’s growth rate ex tech is estimated to come in at 9.8% vs 12.2% for US market as a whole.

A sizeable rebound in EPS growth is still expected across most regions in 2024
US EPS growth of almost 10% is expected this year excluding technology
US Analyst EPS Estimate Trails (USD)
EPS growth forecasts and historical CAGR (%)
Source: Wilshire Indexes, FactSet. Data as of February 19, 2024.

Latest Report

March 1, 2024

AI-stock exuberance drives FT Wilshire 5000 to new highs

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February 2024
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February 1, 2024

Markets lose momentum as Fed dampens optimism over March rate cut. China continues to see sizeable declines.

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January 2024
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January 2, 2024

FT Wilshire 5000 delivers 6th best annual return since 2000

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December 2023
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December 4, 2023

Risk appetite returns as peak rate optimism drives market rebound

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November 2023
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November 1, 2023

Risk aversion comes to the fore as rising bond yields and geopolitical concerns drive declines across global equity markets.

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October 2023
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October 2, 2023

Surging US bond yields thwart the equity market rally in Q3, oil price spikes to 10 month high on tightening supply.

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September 2023
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September 6, 2023

August sees heightened volatility on rising bond yields and Chinese growth concerns but YTD equity returns remain strong

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August 2023
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August 2, 2023

Further signs of falling inflation help broaden and maintain market rally as ‘unloved’ sectors outperform in July

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July 2023
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July 5, 2023

Strong finish to the second quarter as market rally broadens out

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June 2023
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June 5, 2023

Technology stocks continue to dominate US equity returns; AI and Semiconductors the clear winners

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May 2023
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May 5, 2023

UK equities the standout performer in April. US sees modest rotation from growth into value last month.

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April 2023
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April 4, 2023

Markets rebound in late March as bank contagion fears ease

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Monthly Analysis of global multi-asset absolute and relative FX- adjusted returns. Risk/Return analysis, correlation and Pure Factors.

Global Multi-Asset Returns

Global Multi-Asset Analysis of absolute and relative FX-adjusted returns.

FT Wilshire 5000

US Performance, sector contribution, technical analysis, dispersion.

Pure Factors

Return analysis, comparing Factor vs Style,

Global Equity

Regional multi-currency performance, sector comparison, technical analysis.

Additional asset classes

Fixed income, alternatives, foreign exchange.

Risk/Return analysis

Regional and multi-asset, multiple time periods.
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Latest Report

February 21, 2024

Markets weigh up AI trade vs waning rate cut optimism

February 2024
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February 2024
February 2024
January 24, 2024

Will US EPS growth take the baton as a key market driver?

January 2024
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January 2024
January 2024
November 15, 2023

The 2024 market outlook ‘Magnificent 7’ wish list

November 2023
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November 2023
November 2023
October 19, 2023

Despite near term US economic momentum the key question is what outlook are markets pricing in for 2024?

October 2023
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October 2023
October 2023
September 22, 2023

Reassessment of the US interest rate trajectory for 2024 implies maintenance of restrictive US financial conditions for the foreseeable future

September 2023
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September 2023
September 2023
August 16, 2023

Have markets become too complacent about a soft landing outcome?

August 2023
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August 2023
August 2023
July 20, 2023

Cooling inflation has buoyed risk appetite despite concerns that tight financial conditions could produce a double–dip

July 2023
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July 2023
July 2023
June 16, 2023

Equity risk appetite buoyed by debt ceiling resolution, disinflation trajectory and imminence of peak rates

June 2023
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June 2023
June 2023
May 18, 2023

First uptick in US EPS estimates in twelve months, but questions remain over the 2024 growth rate forecast

May 2023
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May 2023
May 2023
April 17, 2023

Markets rebound post-SVB as cooling inflation and weaker economic data keep market rate expectations anchored

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Analysis of trends in global growth, inflation, financial conditions, profits, valuation and sentiment cycles using our proprietary indicators

Market Driver Barometer

Movement and in-depth analysis of US Market Drivers.

Driver Pulse Sheets

Comprehensive data and analytics relating to the drivers across the regions.

In-depth coverage

Multi-asset returns, long perspectives, performance, and risk vs return analysis.
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