Stock prices globally are expected to mark a ten-year rise in March, 2018. \
Still, international investment banks and capital managers, in their first projections for the coming year, project 10 percent gains in stock prices internationally.
Credit Suisse, for 2018, projects a total nine percent hike, with gains mainly in the first half of the year.
Deutsche Bank’s assessment is that those in the market can demand a higher risk premium, due to the long-term upward cycle.
Stock prospects are good due to strong global growth. The rate of increase in corporate profits, which is projected at an average of 10 percent internationally, is expected to be reflected in rising stock prices.
The upward trend in stock markets, resulting from a favourable international confluence of events, and double-digit corporate profits globally, will continue in 2018, according to an assessment by NN Investment Partners. The firm opines that stocks will be, in terms of returns, the best type of assets to hold next year.
The analysis is based on the principle that, historically, the transition from bull markets to bear markets is triggered only by recessionary economic policies, and that this prospect is not likely in the next 12 months.
That is because of the favourable macro-economic juncture, which is characterised by robust growth in all economic zones, and is fueled by various economic players (consumers, businesses, and states), while corporate profits are expected to grow at a double-digit rate.
That profit increase is likely to be the basic motive force behind the rise in stock prices.
The markets that are recommended in the assessment are Japan, emerging markets, and the eurozone.
The report predicts three major challenges in 2018: Italian elections in the first quarter, the US tax reform (major tax cuts), and the American interim elections, all of which can impact on investor psychology.
Tasos Mantikidis
