Equity Analysis and Big Tech Paralysis

Equity market niches, transformational technologies, and valuation innovation

As the Fed pivots to a more hawkish policy stance, the S&P 500 Index is up over 25% year-to-date – largely on the heels of 'big-tech'/FAANG companies. Robeco takes a look at some of the niche areas where upstarts are challenging larger tech incumbents.

Is there a bubble in the U.S. equity market or are valuations rational due to highly favourable structural conditions? Below we present the first in a series of five fascinating papers from Oliver Wyman. The 'Holistic Market Model' seeks to provide investors with a new understanding of equity market valuation, re-engineering CAPM to allow for inflation expectations, creating a new definition of the equity risk premium, and introducing a new Supply/Demand Balance Model. This series will prove to be a must-read for asset allocators everywhere.

Past, Present, and Future of the U.S. Equity Market (Oliver Wyman, 2021)

This paper, the first in a series from Oliver Wyman, analyses the secular and structural forces that have driven U.S. asset markets, and particularly the equity market, over an extended period. They question why U.S. stock market valuations have varied so much over time, and whether historical valuation methods addressed many of these forces. The authors suggest a new valuation model which may help to provide some context for future uncertainty.

Finding Those Growth Niches in the Shadow of ‘Big Tech’ (Robeco, Dec 2021)

In the zero-sum game of big tech, ecommerce giants are facing competition from niche upstarts.

10 Transformational Technologies Powering the 21st Century (PGIM, Dec 2021)

This PGIM infographic presents 10 transformational technologies, including quantum computing, 3D printing, augmented reality, robots, and space technology.

The Future of Pharma: Increased returns or the age of biotech? (Aviva, Dec 2021)

For compliance reasons, this paper is only accessible in certain geographies

Aviva Investors discusses some of the recent innovations within the healthcare sector.

Motherlode: Market capitalisation and valuations (Hussman Funds, 2021)

Hussman Investment Trust President John Hussman presents a valuation of U.S. equity markets. He believes that the present valuations of U.S. equities denote a bubble.

The 2021 surge in inflation: A look at sticky prices (VoxEU, 2021)

The following article looks at sticky-price inflation versus CPI and the differences between the two inflation metrics.