- Fears of interest rate rises have again hit equity markets
- Growth cases will depend on the exit from the pandemic and coping with inflation
Having started the year strongly, equity markets have sold off on fears of rate increases sooner than expected to combat inflation. This impacts the valuation of companies' future profits and so affects the prices investors are prepared to pay for growth stocks. Furthermore, companies that would have been expected to do well in a full re-opening of the global economy may face issues with supply chains and the pressure inflation may bring to bear on their customers' disposable income.
All of which means that both the 'growth' and the 'reasonably priced' aspects of companies flagged by our screen should be carefully considered. There may yet be revisions to growth forecasts in the next few weeks and the possibility of cheaper entry points definitely exists.