Q4 2023 equity market outlook
Five charts on attractive opportunities, US equity valuation and unsustainable low saving rates
![](/is/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q4-2023-equity-market-outlook/_jcr_content/mainpar/spotlight/image-xss.580.jpg/1696525439733.jpg)
Five charts on the key equity market drivers (Q4 2023)
Five charts on the key equity market drivers (Q4 2023)
Global Concentrated Alpha outlook summary:
- In our Q3 equity market update, we stated that the market was ignoring risks in the first half of the year, but - despite a positive July - there is more appreciation for interest rates remaining higher for longer amongst investors
- The question is how much longer the US economy could remain supportive and the US consumer spending
- As a result, we see more attractive opportunities in defensive sectors
- Equity valuations in the US seem extended despite no earnings growth, while rest of world looks more supportive
Figure 1: The pandemic has significant impacts on personal income and consumption
Figure 1: The pandemic has significant impacts on personal income and consumption
![US consumer excess savings are falling](/is/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q4-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid_copy_31/col1/textimage/image.580.png/1696525439940.png)
Figure 2: The savings rate is abnormal low after pandemic-related volatility
Figure 2: The savings rate is abnormal low after pandemic-related volatility
![The US consumer savings rate is below its 2019 average](/is/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q4-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid_copy_31/col1/textimage_copy/image.580.png/1696525440005.png)
Figure 3: European cyclicals vs Defensives relative and PMI
Figure 3: European cyclicals vs Defensives relative and PMI
![European cyclical companies have outperformed defensives, despite falling PMI data](/is/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q4-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid_copy_31/col1/textimage_1405692454/image.580.png/1696525440067.png)
Figure 4: S&P 500 12m Fwd. P/E
Figure 4: S&P 500 12m Fwd. P/E
![Equity valuations in the US seem extended despite no earnings growth](/is/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q4-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid_copy_31/col1/textimage_1405692454_87492930/image.580.png/1696525440132.png)
Figure 5: MSCI US 12m Fwd. EPS
Figure 5: MSCI US 12m Fwd. EPS
![Equity valuations in the US seem extended despite no earnings growth](/is/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q4-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid_copy_31/col1/textimage_1405692454_1689851724/image.580.png/1696525440194.png)
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