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Macroview Last week, on November 18th, we published our key takeaways for our 2016 macroeconomic and strategic scenario. In the following post, we feature the conditions under which two alternative scenarios for 2016 , one positive and one negative, could materialize. Please see our “Macroeconomic and Strategic Scenario for 2016: Key takeaways” post for a detailed overview. Upside risks for a positive alternative scenario Greater acceleration of economic growth in Europe, driven by stronger-than-expected credit and/or fiscal expansion. Central bank and market liquidity driving an expansion of valuation multiples for DM equities, pushing them well into excess territory. A stronger impact of innovation on global economic growth and a positive turn in earnings momentum. A rise in oil prices, which would probably boost corporate profits in the energy sector and trigger positive momentum. Any of these risks would allow for an expansion of valuation ratios and bolster equity markets. Downside risks for a negative alternative scenario A policy error in China that causes growth to fall below the 6.7% target. A stronger-than-expected upturn in inflation, driven by a rise in wage growth above productivity growth in the US, showing the Fed to be behind the curve. Political destabilisation in Europe, with the impact of the migration crisis exceeding expectations.
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Christophe Donay considers the following as important: Macroview
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Macroview
Macroview Last week, on November 18th, we published our key takeaways for our 2016 macroeconomic and strategic scenario. In the following post, we feature the conditions under which two alternative scenarios for 2016 , one positive and one negative, could materialize. Please see our “Macroeconomic and Strategic Scenario for 2016: Key takeaways” post for a detailed overview. Upside risks for a positive alternative scenario Greater acceleration of economic growth in Europe, driven by stronger-than-expected credit and/or fiscal expansion. Central bank and market liquidity driving an expansion of valuation multiples for DM equities, pushing them well into excess territory. A stronger impact of innovation on global economic growth and a positive turn in earnings momentum. A rise in oil prices, which would probably boost corporate profits in the energy sector and trigger positive momentum. Any of these risks would allow for an expansion of valuation ratios and bolster equity markets. Downside risks for a negative alternative scenario A policy error in China that causes growth to fall below the 6.7% target. A stronger-than-expected upturn in inflation, driven by a rise in wage growth above productivity growth in the US, showing the Fed to be behind the curve. Political destabilisation in Europe, with the impact of the migration crisis exceeding expectations.
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Christophe Donay considers the following as important: Macroview
This could be interesting, too:
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Last week, on November 18th, we published our key takeaways for our 2016 macroeconomic and strategic scenario.
In the following post, we feature the conditions under which two alternative scenarios for 2016 , one positive and one negative, could materialize. Please see our “Macroeconomic and Strategic Scenario for 2016: Key takeaways” post for a detailed overview.
Upside risks for a positive alternative scenario
- Greater acceleration of economic growth in Europe, driven by stronger-than-expected credit and/or fiscal expansion.
- Central bank and market liquidity driving an expansion of valuation multiples for DM equities, pushing them well into excess territory.
- A stronger impact of innovation on global economic growth and a positive turn in earnings momentum.
- A rise in oil prices, which would probably boost corporate profits in the energy sector and trigger positive momentum.
- Any of these risks would allow for an expansion of valuation ratios and bolster equity markets.
Downside risks for a negative alternative scenario
- A policy error in China that causes growth to fall below the 6.7% target.
- A stronger-than-expected upturn in inflation, driven by a rise in wage growth above productivity growth in the US, showing the Fed to be behind the curve.
- Political destabilisation in Europe, with the impact of the migration crisis exceeding expectations.
- A credit event in the weakest EMs (eg Brazil, Turkey), which could prompt a systemic crisis.
- Any of these risks would result in a fall in equity market valuations and a bear trend in equities, higher volatility and wider bond spreads.