Tuesday, August 22, 2017 1:30 PM EDT
Since last summer, I have written several blog posts on positive earnings from the S&P 500 constituents. We view accelerating earnings growth as a key driver of stock prices moving forward. Schwab's Chief Global Investment Strategist Jeffrey Kleintop just wrote a very compelling post called "Earnings may be about to do something they've never done before." Thanks to global growth picking up across virtually all regions, global earnings (measured by the MSCI All Country World Index) are expected to reach new heights in the near future. This is also bullish for the S&P 500 which generates roughly 44% of its revenues from outside the US.
(Click on image to enlarge)
Interestingly, it was a different region that drove world earnings to the $30 level each time.
- In 2008 it was Europe and the emerging markets that contributed the most to lifting global earnings to $30.
- In 2011, the full rebound in the United States and emerging markets were the drivers back to $30.
- In 2014, Japan's rebound to its prior peak offset weakening emerging markets to reach $30 again.
- In 2017, the current rebound to $30 was supported by a rise in all regions.
This time is notably different as all regions are back on the path of growth and this trend is expected to continue in 2018. The IMF forecasts global growth to accelerate next year. This should be good news for stocks and a reason to remain bullish for the short to intermediate term.
Disclosure: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no ...
more
Disclosure: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede Capital Management, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede Capital Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Runnymede Capital Management, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.
less
How did you like this article? Let us know so we can better customize your reading experience.