Global equities are expected to rise 5 percent by the end of the year as any lingering concerns of an impending economic collapse diminish, according to economists at Citi.
“We expect global equities to rise 5 percent by the end of 2017 (and) with fundamentals improving, valuations reasonable and interest rates still low we upgrade Europe, excluding the U.K., to overweight,” Citi economists said.
Citi analysts forecast all major markets to report healthy earnings per share growth in 2017 which would represent the first synchronized upturn in almost a decade. The global bank’s analysts pointed to an uptick in economic growth globally, increased commodity prices and subsiding political risk in Europe for its bullish outlook.
Citi credited its own in-house “Bear Market Checklist” which it used to compare global market variables at times of historic financial crises to the current day.
“Right now, only 3/18 factors are flashing sell compared to 17.5/18 in 2000 and 13/18 in 2007,” Citi analysts said in the note.
