3 December 2018
What's new in the financial markets?
Chief Investment Officer ING Belgium
Thierry Masset, Chief Investment Officer reviews the economic and financial news. Every month, he analyses events that have impacted the financial markets. The context of any potential stock market fluctuations is equally scrutinized. You can find this market analysis and ING's investment strategy by consulting our "Monthly Market Review".
So what are the key points this month?
- There is still some trading day left in 2018, but already this year is the worst for global equity markets since 2011 (-6.6%), with the MSCI All Country World index losing about 1% in euro.
- Markets are ignoring what is likely to be the biggest year for U.S. profit growth this decade and turning their focus to the first signs of an impact in the corporate outlook from the raging trade war, a slower global activity and higher interest rates.
- In a typical late cycle, characteristics that distinguish resilient equity portfolios include defensive and value-style investing.
“The protectionist rhetoric is a shock of uncertainty that has also begun to spread to companies which may be experiencing a peak earnings growth. The bottom lines of corporations in the S&P 500 are expected to rise 23.5% this year. But much of that seems to be a one-time boost, and not the sustained higher growth that Trump and his advisers promised from low tax rates. Analysts are now expecting 2019 earnings growth to slow to 10.1%, virtually the same growth they were predicting back in June 2017, six months before the passage of the tax cut.”