The question on everyone’s mind is: can the markets sustain their 2017 performance in 2018?
Certainly, it’s been “a drama-free, banner year for equities,” says BMO chief economist Douglas Porter in an economics report. “The S&P 500 never saw so much as a 3% micro-correction for the entire year,” he says, adding that record highs on the indexes fell “like dominoes,” led by a 28% jump in the Nasdaq. Almost all equity markets advanced, except Russia.
But what goes up, must come down, right?
“With the S&P 500 now trading at roughly 18 times forward earnings, the odds of a correction have certainly increased,” say National Bank economists Stéfane Marion and Matthieu Arseneau in a report.
But they don’t foresee a severe or extended pullback. That’s because the underlying economy is strong (despite the Bank of Canada governor tossing and turning at night).
Nick Exarhos, director at CIBC World Markets, offers specifics in a report. Referring to the S&P, he says, “Strength in the labour market and higher rates should help support tech and consumer-focused sectors along with financials, while tax reform allowing immediate expensing of capital expenditures should give a lift to industrials.”
For fuller comment on investing in 2018, we’ve rounded up a baker’s dozen of outlooks:
- BlackRock: Global investment outlook 2018
- BNP Paribas: The tide is high—2018 investment outlook
- Credit Suisse: Investment outlook 2018
- Goldman Sachs: 2018 investment outlook
- HSBC: Investment outlook 2018
- Invesco: Taking tally of the global rally
- J.P. Morgan: A difficult place to start—Investing in 2018 and beyond
- Macquarie: 2018 global investment outlook
- Pinebridge Investments: 2018 investment outlook
- RBC: After a highly unusual 2017, what’s in store for 2018?
- Russell Investments: 2018 global market outlook
- Vanguard: Vanguard economic and market outlook for 2018: Rising risks to the status quo
- Wells Fargo: 2018 outlook: Moving ahead in an aging recovery