The question on everyone’s mind is: can the markets sustain their 2017 performance in 2018?
Read: Synchronized global growth favours equities, but risks lie in wait
Certainly, it’s been “a drama-free, banner year for equities,” says BMO chief economist Douglas Porter in an economics report. “The S&P 500 never saw so much as a 3% micro-correction for the entire year,” he says, adding that record highs on the indexes fell “like dominoes,” led by a 28% jump in the Nasdaq. Almost all equity markets advanced, except Russia.
But what goes up, must come down, right?
Read: Investors could be disappointed by equities in 2018: report
“With the S&P 500 now trading at roughly 18 times forward earnings, the odds of a correction have certainly increased,” say National Bank economists Stéfane Marion and Matthieu Arseneau in a report.
But they don’t foresee a severe or extended pullback. That’s because the underlying economy is strong (despite the Bank of Canada governor tossing and turning at night).
Read: Expect growth until late 2020: Desjardins
Nick Exarhos, director at CIBC World Markets, offers specifics in a report. Referring to the S&P, he says, “Strength in the labour market and higher rates should help support tech and consumer-focused sectors along with financials, while tax reform allowing immediate expensing of capital expenditures should give a lift to industrials.”
Read: 5 economic trends to watch in 2018
For fuller comment on investing in 2018, we’ve rounded up a baker’s dozen of outlooks:
- BlackRock: Global investment outlook 2018
- BNP Paribas: The tide is high—2018 investment outlook
- Credit Suisse: Investment outlook 2018
- Goldman Sachs: 2018 investment outlook
- HSBC: Investment outlook 2018
- Invesco: Taking tally of the global rally
- J.P. Morgan: A difficult place to start—Investing in 2018 and beyond
- Macquarie: 2018 global investment outlook
- Pinebridge Investments: 2018 investment outlook
- RBC: After a highly unusual 2017, what’s in store for 2018?
- Russell Investments: 2018 global market outlook
- Vanguard: Vanguard economic and market outlook for 2018: Rising risks to the status quo
- Wells Fargo: 2018 outlook: Moving ahead in an aging recovery
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