FÜR QUALIFIZIERTE ANLEGER

Sustained expansion

02-Okt-2017
By BlackRock Investment Institute

The increasing breadth of the global economic expansion is pointing to a longer lifespan. We examine the state of the current cycle.

Kate Moore, Chief Equity Strategist, discusses the sustained expansion theme.

A broadening of steady growth beyond the US gives us confidence that the global expansion is sustainable. Roughly three-quarters of economies are on an upswing, including all of those in the Eurozone (a first in the post-crisis period). 

We believe the current cycle is progressing slowly, partly because economic growth has been restrained by an ageing population. As a result, we believe the current US economic cycle has ample room to run – likely years. Looking globally, we see abundant support for our positive view on equities. 

The momentum equity style factor has also been on a tear this year, as many US and global companies with strong price momentum have posted double-digit gains. Our expectation for a steady, sustained expansion suggests momentum will continue to have more upside potential.

You may consider: staying committed to equities, and thinking globally

A sharp earnings recovery is supporting stocks globally, favouring non-US markets. All major regions are posting earning-per-share growth of over 10% for the first time since 2005, with the exception of the post-crisis bounce. Europe is sustaining above-trend economic expansion. Japan has seen a jump in earnings expectations. And in emerging markets, improving cash flows and reasonable valuations look appealing.

DOWNLOAD SUSTAINED EXPANSION REPORT

This material is prepared by BlackRock and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of October 2017 and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This material may contain ‘forward-looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell in any securities, BlackRock funds or any investment strategy nor shall any securities be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. In the EU issued by BlackRock Investment Management (UK) Limited (authorised and regulated by the Financial Conduct Authority). Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Registered in England No. 2020394. Tel: 020 7743 3000. For your protection, telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited. This material is for distribution to Professional Clients (as defined by the FCA Rules) and Qualified Investors and should not be relied upon by any other persons. For qualified investors in Switzerland, this material shall be exclusively made available to, and directed at, qualified investors as defined in the Swiss Collective Investment Schemes Act of 23 June 2006, as amended. In Singapore, this is issued by BlackRock (Singapore) Limited (Co. registration no. 200010143N) for use only with institutional investors as defined in Section 4A of the Securities and Futures Act, Chapter 289 of Singapore.

The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. Investment involves risk including possible loss of principal. International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation, and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are often heightened for investments in emerging/developing markets or smaller capital markets.

©2017 BlackRock, Inc. All Rights Reserved. BLACKROCK is a registered trademark of BlackRock, Inc. All other trademarks are those of their respective owners.

MKTG1017E-273587-822791