What an interesting first quarter it turned out to be. At first, global stock markets surged, with the US S&P 500 index hitting its 2023 high on 2 February. Then the UK FTSE 100 index hit an all-time high on 16 February.
However, following the collapse of three mid-sized US banks and Swiss giant Credit Suisse, share prices nosedived. From its February peak to its 13 March low, the S&P 500 dropped nearly 8%. Meanwhile, the FTSE 100 slumped 8.8% from its high to its 17 March close.
Shares bounce back
But as it turns out, Q1 turned out pretty well for global stock markets. Here’s what happened in major markets since 30 December 2022 (sorted from highest to lowest gain):
| Index | Q1 gain |
| Nasdaq Composite | 16.8% |
| STOXX Europe 600 | 7.8% |
| S&P 500 | 7.0% |
| FTSE 100 | 2.4% |
By far the best performer among these four indices was the Nasdaq Composite, up more than a sixth in Q1. This is the tech index’s best quarterly result since Q2 2020, when share prices soared after the early pandemic panic.
Meanwhile, European and large-cap US stocks racked up quarterly returns of 7%+. The FTSE 100 was the laggard, returning 2.4%. Even so, this is above its long-term quarterly average.
For investors with heavy exposure to US large-caps and tech mega-caps (including me), this has been a great quarter. Indeed, I’m happy with my investing returns so far this year.
In summary, despite all the market’s sound and fury in March, it signified nothing, as global equities had a solid Q1.
These FTSE 100 stocks plunged
As a value investor, I’m enjoy bargain-hunting for undervalued shares. I’m not catching ‘falling knives’ that later draw blood. I’m after ‘fallen angels’ — solid companies whose shares I view as temporarily depressed.
Of 100 shares in the Footsie, 62 rose in value in Q1. These gains ranged from 0.1% to 61.2%. The average rise across these winners was 12.4%.
This leaves 38 losers, which dropped between 0.2% and 17.7% in Q1. The average decline among these laggards was 6.2%.
For the record, these are the FTSE 100’s five biggest flops so far in 2023:
| Company | Sector | YTD change | One-year change | Five-year change |
| British American Tobacco | Tobacco | -13.1% | -11.6% | -33.9% |
| Ocado Group | Retail/Tech | -13.5% | -54.8% | +2.8% |
| Glencore | Mining | -16.1% | -8.7% | +32.0% |
| Anglo American | Mining | -16.4% | -33.5% | +68.0% |
| Fresnillo | Mining | -17.4% | +0.2% | -40.0% |
Note that the three biggest losers — with share prices dropping roughly a sixth over three months — are all mining companies. This comes as no surprise to me, given commodity prices — and notably base-metal prices — have fallen in 2023.
Top of the flops
For me, the pick of these dogs would be Anglo American (LSE: AAL). At Friday’s closing price of 2,678p, this £36bn company’s stock trades on a price-to-earnings ratio of nine and an earnings yield of 11.1%.
What’s more, Anglo’s dividend yield of 6.1% a year is covered 1.8 times by earnings. And with this share down 37.6% from its 52-week high, it looks a steal to me.
Of course, I could be wrong — if global growth slows and major economies go into recession, then commodity prices could fall further. This would harm Anglo’s 2023 profits, earnings and cash flow.
Nevertheless, if only I had some spare cash to buy this cheap stock now!
