In the latest Global Outlook, Barclays’ Research team expects equities to continue to rally in the current low-volatility macroeconomic environment and global political backdrop.
Ajay Rajadhyaksha, Barclays’ Head of Macro Research, discusses the outlook for Q4 2017, as outlined in a recent report, Global Outlook: Too early to play defense. With markets rallying and elevated asset valuations potentially more of a concern, some investors are wondering if valuations and positioning point to a tactical pull-back from risk.
The latest Global Outlook argues that investors should be encouraged that the equity rally has been driven by earnings growth, not multiple expansion, and believes stocks should still out-earn bonds. The report cites tightening monetary policy as the catalyst that could upset valuations in risky assets, but argues that low inflation mitigates this risk.
The report and video above highlights: