As earnings growth slows, the key driver of global equity markets will increasingly be the global macroeconomic picture and the direction of interest rate movements, although the M&A boom, which is expected to last, will play a supporting role.
“In terms of global demand we’re past the peak already,” says Thierry Cantet, senior European strategist at SG Corporate and Investment Bank. “While we still expect growth this year to be stronger than in 2005, this is down to the exceptional first half. World demand growth is losing momentum and the pace of growth is slowing.”
A belief that the global economy will deteriorate over the next 12 months is approaching a consensus, with a net 70%...
