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Trends & Analysis
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Philips shares gain on Q4 results, job cuts
News
American Express shares rise despite earnings miss
News
Mastercard’s shares decline despite upbeat results
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Tesla’s stock surges after upbeat Q4 print
News
Is there a golden opportunity with Shopify?
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Investors unimpressed by Microsoft’s earnings beat

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Asset Watch

Will German value outperform U.S. growth in 2023?

 

Tuesday, January 3, 2023

After a dismal 2022, investors hope that 2023 will bring less pain and more gain across global equities. However, with value sectors materially outperforming growth, The Dow Jones Industrial Average lost less than 10% in 2022, while the NASDAQ Composite lost more than 30%. As a result, companies with positive earnings and cash flow outperformed in 2022.
Moreover, famed hedge fund manager Daniel Loeb wrote on Dec. 26:
“I don’t think camping out in the last decade’s darlings, with rosaries in hand, hoping for a comeback, will be the winning strategy [in 2023]. We have already seen the revenge of the value nerds. I think more to come.”
Thus, if the value trade has legs, should you favor the DAX Index over the S&P 500?

For one, the latter ended 2022 below its 50, 100 and 200-day moving averages, while the former remains above its 100 and 200-day MAs, and ended the Dec. 30 session only slightly below its 50-day MA. On top of that, the August closing high and the 50-day MA have provided resilient support, despite the volatility that emerged in mid-December.

Therefore, the only caveat is that the DAX Index’s MACD indicator still sports a sell signal, which will hold more weight if confirmed breakdowns below these key levels occur.

So, should you continue to ride the hot hand, or play the contrarian in 2023?


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