Strategy

Global Markets Will Hit New Highs Next Year; Disruption Will Fuel Earnings, Says PineBridge

Josh O'Neill Assistant Editor 1 December 2017

Global Markets Will Hit New Highs Next Year; Disruption Will Fuel Earnings, Says PineBridge

The firm has published its global investments outlook for 2018, which shows positive signs for active managers.

Disruption will create opportunities across global markets and asset classes next year, and many markets will top long-term averages, according to PineBridge Investments.

“Heading into 2018, we are seeing disruption of all kinds create opportunities in markets,” Greg Ehret, chief executive of the global investment manager, said. “Following years of false starts for growth in the global economy, we expect many markets to reach a high point in 2018.  For the first time in five years, growth will be above long-term averages.”

As we approach 2018, PineBridge sees a “solid environment” for global equities. 

Europe, Asia, Japan and the US are all showing signs of synchronised growth, the firm said, and earnings expectations, on average, are “being revised up” as a result. 

At the same time, central banks remain “very supportive” of markets, the firm pointed out, which showcases increasing opportunities for active, bottom-up investors. 

Ehret warned, however, that “this environment will not benefit all assets equally, requiring investors to be both active and selective to make the most out of their portfolios”.

PineBridge Investments has said it expects manufacturing-based business investment to “rebound”, which will in turn “send a powerful stimulus along the global manufacturing supply chain”.

“The good news for equity investors is that company fundamentals are turning up,” said Anik Sen, global head of equities. “For the first time in the last nine years, earning expectations are solid and improving, most notably and recently in Europe, Asia and Japan. Opportunities will be driven by selection – no longer at the market index level but what is happening within them. The next several years will be a different investing period compared with the last nine and will be particularly attractive for active management.”

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