- Corporate earnings in 2019: A fading momentum is in store!
Corporate earnings in 2019: A fading momentum is in store!
Tuesday 23 October 2018
Research / Market
After two years of strong earnings momentum, EPS growth is expected to decline considerably from 2019.
Between global growth reaching its climax, the fading impact of US tax reform, the declining contribution of oil and commodities and the rising wage costs and tariffs, the consensus is likely to be negatively surprised.
MSCI ACWI EPS growth which amounted to +17% in 2017 and is estimated at +16% in 2018, could fall to +7% in 2019, instead of +10% expected by the IBES consensus.
Although it is unlikely that market PE will rise in the latter part of the cycle, the prospect of a downgrading of consensus figures could weigh on the equity markets.
Emerging Markets Charts & Views - Seek opportunities, but be aware of short-term volatility
Emerging markets (EM) started 2019 on a strong footing and, as a result, some excessive valuation gaps have been partially closed.
Brexit: an agreement is now more likely, but be aware of a no deal risk, not priced in
The concept of factor investing and the debate around passive and active management has emerged since the end of the 2000s and has completely changed the landscape of equity investing.
Gold in central banks' asset allocation
After a long lacklustre period during the 1980s and 1990s, the price of gold has picked up significantly since the new millennium, and central banks, after having steadily reduced their allocation to gold, have resumed their gold purchases.