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Credit Suisse: Clock Ticking for Equities' Last 'Hurrah'

Credit Suisse: Clock Ticking for Equities' Last 'Hurrah'
(DreamsTime)

Wednesday, 29 November 2017 09:22 AM

Investors may only have seven months left to savor a bull run that has added $27 trillion to global equity markets this year, say Credit Suisse Group AG strategists.

While they predict economic growth and steady profits will help add another 6 percent to the MSCI All-Country World Index by mid-2018, stocks are unlikely to push any higher after that.

Risks that could make the second half “more difficult” include a flare-up in junk debt markets, China’s tightening policy and accelerating wages in the U.S, according to a Nov. 28 note.

“There is likely to be one ‘last hurrah’ for equities in 2018,” strategists led by Andrew Garthwaite wrote in the note. “We do see rising risks in the second half of 2018, however, and hence forecast flat markets.”

Credit Suisse joins strategists at Morgan Stanley in warning that investors won’t have it so easy next year. Despite missile launches from North Korea, a deleveraging campaign in China, political wrangling in the White House, the U.K. and even Germany, and a slowdown in monetary stimulus, global equities are at a record. The MSCI gauge extended this year’s gain to 20 percent on Wednesday, boosted by optimism over tax reform in the U.S.

Europe is a bright spot for Credit Suisse. The region has missed out on the double-digit gains seen in Asian and U.S. markets this year. The brokerage increased its overweight recommendation on the region, saying its discount to global peers and European banks’ exposure to rising bond yields make it the best place for equity investors in 2018.

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Investors may only have seven months left to savor a bull run that has added $27 trillion to global equity markets this year, say Credit Suisse Group AG strategists.
credit, suisse, clock, ticking, equities, last, hurrah
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2017-22-29
Wednesday, 29 November 2017 09:22 AM
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