There was a huge rally in global equities in the middle of October after markets reached six-year lows. The catalyst was the third-quarter earnings reports of US corporations. Most seemed to beat consensus forecasts.
Does this mean that the bear market that began in OECD equities in March 2000 is now over? I don’t think so. Corporate profit growth will continue to be hindered by low margins. Combined with widening corporate bond yield spreads, this means US Inc is adding little value.
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