Stretched valuations, rate hikes to limit developed markets equity gains


Outlook better for high yield bonds, emerging market equities and gold

Outlook for the developed market equities in general looks bleak for the rest of the year with upward gains limited as valuations, especially of US equities appears stretched and the potential two rounds of rate hikes hurting liquidity, according to Xavier Denis, Director, Global Strategy, Societe Generale.

“While global equity markets have recovered strongly from their February lows, receding fears on US and China growth, and further easing measures by European Central Bank (ECB) and Bank of Japan (BoJ) and the recovery in oil prices, a continuation of the rally would require stronger economic data and improved earnings momentum given global equities’ expensiveness at present,” said Denis.

Read the whole article on Gulf News' website