Jan. 30, 2017
Equity markets rebounded in response to corporate optimism following the U.S. election and the continued recovery in energy and material prices.
Overall earnings growth has improved along with economic momentum.
The U.S. Federal Reserve declared a broadly expected interest rate hike, increasing the overnight rate by 25 bps to 0.75%.
In the long term, equity markets should become more discriminating as interest rates begin their long road back to normal levels.
We believe the global economic growth trend will continue on its current modest path.
Most developed economies, including China, will face weaker working age population growth as baby boomers move into retirement.
Global productivity growth continues to decline, however we remain optimistic in the private sector’s ability to innovate.
Market valuations, particularly in the U.S., are viewed above average, but still not at extreme levels.