Strong Fundamentals Leave Bull Market Intact

Here’s What We’re Thinking

November 15, 2017

Global markets grinded higher over the past month notwithstanding a bout of profit-taking in recent days. Economic reports around the world continue to point to solid growth momentum with 2017 on pace to post among the best global GDP growth rates since 2011. Economic momentum has broadened out to the four corners of the world over the past year with every major economy posting positive growth, reflecting a sturdier global recovery phase. This has translated into solid double-digit corporate earnings growth in the third quarter once the insurance sector has been excluded following its large, hurricane-related losses…

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Markets Reach New Highs On Improving Fundamentals

Here’s What We’re Thinking

November 1, 2017

Global equities, commodities and bond yields trended higher over the past month on encouraging economic data and earnings reports. In particular, manufacturing surveys, GDP data and labour market numbers have remained consistent with a solid pace of economic activity that continues to trigger ongoing upward revisions to growth forecasts. In the ongoing third-quarter reporting season, U.S. earnings and sales results continue to outperform analyst consensus estimates with earnings per share (excl. the insurance sector) growing at a very healthy 7.4% y/y rate, in large part thanks to stellar results from mega-tech companies. Markets have a litany of event risk to manage through over coming weeks including awaiting U.S. President Trump’s nomination of the next Chairperson of the Federal Reserve, Congress introducing a long-awaited tax reform proposal (talk of phasing in corporate tax cuts has weighed on equities recently), a possible ramping up of NAFTA headline risk heading into early 2018 as termination threats linger, etc.

 

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