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Equities

A Constructive View on Growth StocksAConstructiveViewonGrowthStocks

Dec 2, 2022

4 Mins 20 Seconds

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As higher rates weigh on cyclical growth, Mark Baribeau, CFA, Head of Global Equity at Jennison Associates, expects growth stocks capitalizing on secular trends to attract investor attention due to their ability to deliver standout results.

Optimism in the Wait-and-See Economy  

The biggest macro impact investors are likely to see in 2023 will stem from the Fed being largely done, if not finished completely, with this tightening cycle. That's going to be the most important driver for equity markets going forward, and it appears we're near the end of the aggressive phase. Now the Fed needs to let the lagging effect of its rate increases take hold and reassess the situation as it evolves. 

Fundamentals are better than growth stock prices might lead you to believe. Still, given lingering unknowns with potential to impact earnings, companies benefiting from structural demand unlikely to be disrupted by economic conditions appear well positioned for the environment ahead.

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It is a very tricky environment, but opportunities are setting up because valuations have come way down and a lot of companies are doing quite well.
Mark BaribeauCFAHead of Global Equities, Jennison Associates

Big, Secular Trends Frame the Future   

Electric vehicles represent one of the most promising areas of growth. This is a major opportunity because we’re seeing disruption in an industry that’s not used to disruption. And it’s not just the vehicles. It’s also the batteries, the battery supply chain, and the tie-in to alternative energy for producing electricity. 

The luxury goods space also looks attractive. Amid inflation-driven pressure on mass-market spending, demand for luxury goods is much less price elastic. High-end spending patterns are robust around the world, which should be a good source of unique opportunities as overall growth moderates. 

Finally, Latin America is underserved by the banking industry, creating opportunities for companies with innovative financial technology platforms to fill the void. Fintech companies are well positioned to serve customers with the kind of digital services that the legacy banks have been slow to offer in the region.  

VIEW MORE OUTLOOK VIDEOS

Macro Stabilization to Benefit Real Estate
Real Assets

Macro Stabilization to Benefit Real Estate

Dec 5, 2022

PGIM Real Estate’s Rick Romano sees optimism for public REITs with rare buying opportunities as macro visibility improves and private asset values decline.

The Macro Picture and Market Implications
Fixed Income

The Macro Picture and Market Implications

Dec 2, 2022

Daleep Singh, Chief Global Economist at PGIM Fixed Income, looks forward to the Fed reversing course on interest rates as part of his global economic outlook.

Global Macro Offers a Versatile Vantage Point
Equities

Global Macro Offers a Versatile Vantage Point

Dec 2, 2022

PGIM Wadhwani’s Dr. Sushil Wadhwani, CBE, highlights how flexible strategies can provide investors targeted solutions when unfolding events raise new questions.

The views expressed herein are those of Jennison Associates investment professionals at the time the comments were made and may not be reflective of their current opinions and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute an offer to sell or a solicitation to buy any security. 

Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information, nor do we make any express or implied warranties or representations as to the completeness or accuracy. Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated, based on assumptions, subject to significant revision, and may change materially as economic and market conditions change. 

This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation. Clients seeking information regarding their particular investment needs should contact their financial professional. 

Prudential Investment Management Services LLC is a Prudential Financial company and FINRA member firm. Jennison Associates and PGIM, Inc. (PGIM) are registered investment advisors and Prudential Financial companies. PGIM Quantitative Solutions is the primary business name of PGIM Quantitative Solutions LLC, a wholly owned subsidiary of PGIM. PGIM Fixed Income and PGIM Real Estate are units of PGIM. © 2022 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM Real Estate, PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. 

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