Credit Suisse Forecasts Stock Rally to Continue

The global stock rally has even more room to run, according to Credit Suisse’s top equity analysts.

Global shares should see a healthy 6 percent surge until the middle of next year as a solid macro backdrop and earnings fuel the current wave of “rational exuberance,” according to Global Equity Strategist Andrew Garthwaite.

“We have the most broad-based upturn in global growth since 2010 and macro breadth and earnings revisions are closely correlated,” wrote Garthwaite in Monday’s note. “There are clear signs of investment-led growth, and we show this is typically good for both markets and earnings.”

In the U.S. alone, the S&P 500 has added 16 percent since January while the Dow continued to notch all-time highs Tuesday morning. Meanwhile in Europe, the German DAX index is up nearly 15 percent this year and the British FTSE 100 has climbed more than 10 percent. Economists have dubbed the widespread success a synchronized global recovery.

“In Europe, despite the appreciation of the euro, PMI new orders have not rolled over, and remain consistent with nearly 3 percent GDP growth,” added Garthwaite. “The proportion of countries that are experiencing PMI new orders in excess of 52 is now the highest since the immediate recovery from the global financial crisis.”

Even central bank policy seems to be positive for equities for now. Despite announcing the rollback of its extensive portfolio this fall, the Federal Reserve’s efforts will likely not have much impact until late 2018, according to the report.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza