The Path Forward for Markets after Valuation Multiple Expansion

Published on
January 28th, 2021
Duration
50 minutes


The Path Forward for Markets after Valuation Multiple Expansion

Investment Ideas ·
Featuring Amanda Agati and Ed Harrison

Published on: January 28th, 2021 • Duration: 50 minutes

Amanda Agati, chief investment strategist of PNC Financial Services Group, joins Real Vision managing editor Ed Harrison to discuss everything that is driving markets in today’s “new normal.” She highlights the potential for the current bifurcated market environment continuing through at least the first half of 2021 until there is more progress around reopening and brightening around earnings and economic growth. Despite equity valuations staying at elevated levels, Agati believes they are not sitting in bubble territory because they are always a relative game versus the macroeconomic landscape and other asset classes. She notes there has been a significant sentiment shift driven by the outcome of the presidential election and by vaccine news and efficacy rates, and she’s tracking Q4 2020 earnings reports and revisions for 2021 to create some semblance of proper equity valuations. Filmed on January 22, 2021.

Key Learnings:
We need to see the proverbial baton handed off from valuation multiple expansion driving asset prices and the overall market to earnings growth expansion to keep this market rally fueled. The macroeconomic backdrop of low rates for the foreseeable future has pushed yield-starved fixed income investors out the risk curve as longer-range return expectations continue to fall.

Comments

Transcript

  • CK
    Cagatay K.
    30 January 2021 @ 00:33
    To be honest, she didnt say anything new or interesting. It is like a repetition the whole time without any numbers to back it up
    • JN
      Jason N.
      9 February 2021 @ 05:55
      Pretty much agree, she mentioned about EM and yet didn't give any good examples - at the end basically dont buy index, you need an active managed strategy = promotion for her company's product.
  • SC
    Sam C.
    30 January 2021 @ 22:05
    Omg edd please no. Let's go back to in person interviews. For one sound quality is better, chemistry is better and to be honest the conversations flow better.
  • PB
    PHILLIP B.
    29 January 2021 @ 02:11
    Very clear and easy to follow. Cogent. Love it. Great to have this perspective.
  • AL
    Aaron L.
    29 January 2021 @ 01:48
    Ed she said rubber meets the road before you had the chance! Clearly you will either be besties for life, or she will never be invited back! :D
  • AP
    Adam P.
    28 January 2021 @ 22:09
    So what is the positioning?
  • mf
    massimo f.
    28 January 2021 @ 17:52
    I am confused by her thinking here somewhat; so, emerging market earnings are going to go up (to me means inflation and more plentiful earnings), yet earnings are scacre and thus big tech names deserve further premiums? Aren't the two thoughts contradictory?