Equity strategists are cooling on the prospects for further gains in European stocks just as investors poured a record amount of money into the region’s equity funds...
After a French election victory for centrist Emmanuel Macron and analysts suggesting that optimism over better profits is largely priced in, forecasters now see fewer triggers for the rally to continue in 2017.
With 91% of companies in the S&P500 having reported earnings for the first quarter, Q1 2017 earnings season is almost fully in the history books, and is shaping up as the best quarter for annual earnings growth in six years. According to FactSet, the blended earnings growth rate for the S&P 500 in the first quarter is 13.6%, up from 13.5% last week, while revenue is poised to grow 7.8% Y/Y. The rise in profits was a function of both solid sales growth (+7.8%) and a 41 bp expansion in margins to 9.4%.
In the past week, Goldman's warnings about an imminent market correction have been coming out on almost daily basis.
Having kept a relatively low profile for the past month, suddenly anywhere you look, there's Jeff Gundlach - between his presentation at Ira Sohn, his recent appearance on Twitter, and his latest DoubleLine webcast, the bond king has something to say. Today, as his preferred medium, he picked Reuters, where he told Jennifer Ablan what he said previously, namely that European and emerging markets equities are more attractive than U.S. equities, he also opined on volatility, saying that the VIX is "insanely low."
In a note from Goldman's cross-asset strategist Ian Wright, the bank points out something troubling: on one hand, over the past six months, or rather since the US elections, equity markets around the globe have soared, and returns across regions have been "strong" - S&P 500, Stoxx 600, Nikkei 225 and MSCI EM ($) have returned roughly 11%, 16%, 20% and 11% in local currency price terms, respectively, with MSCI World ($) up 12% over the same period. In other words, everything is up.