In the April edition of The Cornerstone Journal of Sustainable Finance & Banking we introduced the Cornerstone Capital Regional Strategy Model in which we ranked seven of the world’s regions/major economies. At the time, we excluded Australia and Canada but, following client feedback, we are now incorporating those two countries in our model – Australia as a stand-alone country, and Canada as part of the North America region. With these additions, the only material change in our analysis is that the Central Europe, Middle East and Africa (CEEMEA) region has been downgraded to Underweight from Neutral. As tensions in Ukraine apparently eased, the Russian stock market rebounded, contributing to relatively strong performance by the MSCI Emerging Markets EMEA Index. However, fundamentals in the CEEMEA region continue to deteriorate. This combination of rising stock prices and deteriorating fundamentals are behind our downgrade of the CEEMEA region to Underweight from Neutral. There is no change to our sector model this month.
Michael Geraghty is the Global Markets Strategist at Cornerstone Capital and formerly the founder of Informed Investor, LLC a consultancy specializing in thought leadership that produces bespoke research reports for institutional investors. Michael has over three decades of experience in the financial services industry including working as an investment strategist at UBS and Citi.