07-01-2022 · Quartalsausblick

Earnings engine in lower gear but still humming

As the new year begins, we maintain our positive outlook for developed markets, as well as our neutral stance on their emerging counterparts. Both the global monetary environment and prospects for corporate earnings remain market-supportive.

    Autoren/Autorinnen

  • Arnout van Rijn - Portfolio Manager

    Arnout van Rijn

    Portfolio Manager

  • Audrey Kaplan - Lead Portfolio Manager

    Audrey Kaplan

    Lead Portfolio Manager

  • Wim-Hein Pals - Head of Emerging Markets team

    Wim-Hein Pals

    Head of Emerging Markets team

Earnings engine in lower gear but still humming

Admittedly, major central banks are aware they may have overdone their stimulus with inflation popping up in many areas. We will thus see more tightening announcements in the first quarter, as they try to normalize policies. The US Federal Reserve (Fed) is now expected to make its first hike in March 2022, with a few more planned for later in the year. This has historically been a more difficult environment for emerging equity markets to perform.

Despite that, our outlook for both developed and emerging markets remains broadly unchanged. Global liquidity is still expansive, and the world’s largest central banks remain accommodative overall. Moreover, as the strong keep getting stronger, earnings expectations are still likely to be outgunned. In fact, in both developed and emerging markets, the outlook for corporate earnings remains supportive. 2021 was a bumper year, but we expect decent growth for 2022 as well.

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