The US engine powering global growth
The US profit cycle remains the dominant force in the global economy, according to Ajay Rajadhyaksha, Global Chairman of Research. Consensus estimates for S&P 500 earnings are for 20% growth this year. Top technology firms are delivering some of that, but it's not just tech as the earnings story broadens. The AI infrastructure buildout is going from strength to strength, creating demand for materials, energy, construction and labour that extends well beyond Silicon Valley. When corporate earnings run this hot, the rest of the economy feels it. Hiring follows profit growth, and the US job numbers have been showing it in recent months.
Powered by the US engine, the global economy should grow 3.1% this year, slightly below last year's speed, but still going strong, our economists estimate. But the fundamentals are largely priced in, making it harder to take an investment stand, our strategists argue. The S&P 500 is up almost 20% since March, Taiwan's stocks around 50% year-to-date and Korea's 75-100%. That makes it harder to find bargains.