Global Equity Market Outlook: Favor U.S.; Stick With ‘Em

LPL Research says, “We continue to favor the United States and emerging markets (EM) over developed foreign markets for global equity allocations. We see the U.S. economy as the primary driver of our forecast for 3.8% global gross domestic product (GDP) growth in 2018, supported by new fiscal policies, while Europe and Japan may lag.* The United States remains a global earnings standout as well. Despite under-performance this year, we continue to see upside potential in EM due to attractive valuations, recent economic growth, favorable demographics, and the potential for resolution to the U.S.-China trade dispute later this year.”

Key takeaways include:

  • U.S. economic and earnings growth continue to stand out globally and support our positive view of U.S. equities.
  • We continue to see upside potential in emerging markets due to attractive valuations, recent economic growth, and potential U.S.-China trade resolution.
  • Our cautious outlook for international developed equities is driven primarily by a lackluster economic growth outlook and structural concerns in Europe.

To read more from John Lynch, Chief Investment Strategist, and Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial, click here.