Robust corporate balance sheets, strong profits growth and rising corporate confidence make a powerful combination.
Can rising dividends and share buybacks provide additional support to global equities in the coming months? Investment Insights investigates.
- ‘Animal spirits’ have returned; still significant supports to equities eight years into the bull market as economic growth momentum broadens
- We expect equity returns broadly in line with earnings growth in 2018; returns therefore likely to be above-average but below 2017
- We believe there is material on-going support for high equity multiples from low rates and from low economic, interest rate and earnings volatility
- We see an additional boost to equities in 2018 from increasing distributions to shareholders
- Main risks to global investor risk appetite are faster-than-expected pace of monetary policy tightening, trade protectionism and hard landing in China…
- …but in aggregate the supports to global equities are broadening not narrowing