1- GLOBAL HOMOGENEOUS RECOVERY
There is a global recovery, and it is also homogeneous if we examine the leading indicators of the OECD, ie the indices that anticipate the trends and turning points of the economic cycle. This is what emerged from the Carmignac web conference “The good, the bad and the ugly: the cycle, central banks and valuations”, edited by Sandra Crowl: “There is a common upward trend in 2017, which should continue also in 2018. As can be seen from the graph, the indices of the most important economic areas have never been so close, and since 2013 not even so high". The indicators examined for Italy are: consumer confidence, industrial orders, production trends, inflation, imports from Germany.
2- STOCK MARKETS: USA BETTER THAN EUROPE
A comparison between Europe and the United States was also made in Carmignac's analysis. “In Europe the recovery is generalized, even if it runs at different speeds – explained Sandra Crowl -. The ECB could therefore have implemented a less accommodating policy, but it continued to do so because inflation remained below 2%, thus inviting prudence”. In the USA, on the other hand, the positive cycle, associated with the climate of confidence in the forthcoming tax reform, pushed market capitalizations further.
3- THE GROWTH IN EARNINGS PER SHARE (EPS) REWARDS EUROPE (AND EMERGING EMBOSSES)
Earnings per share (EPS), which are obtained by dividing the net profit (from which the dividends of preferred shares are subtracted) by the average number of shares placed on the markets, instead see Europe prevail. “While in fact – explains Sandra Crowl – the markets are growing more in the USA, as Europe is penalized by sovereign debt and the banking system crisis, the profits of listed companies grow by 2017% in 12, and will continue to rise by 19 % in 2018, while in the US only +7% in the current year and will tend to be stable". The best performances, as can be seen from the graph, are the emerging countries, which in recent years – like Europe – traveled well below the USA.
4- EMERGING MARKETS WITH THE WIND IN THE FATHER
Driven by positive indicators from China and the sharp recovery in global trade, emerging markets are having a good time, also in the medium-term perspective. “While in the USA – explains Crowl – consumption does not recover, and is supported by debts and an ever-increasing erosion of savings, in 2017 the emerging countries do much better than the developed countries. After the serious fall of 2009-2010, global trade is recovering and the trade balances of emerging countries are more than positive, especially those of China and the countries exporting finished products rather than raw materials”. China in particular is also solving its Achilles heel: capital flight abroad, which reached $2015 billion in 200 and has now been neutralized.
