Our Annual Outlook Report
A rebound in machinery and equipment spending is expected to extend the business cycle, support global growth and lift commodities as well as risk assets in 2018. At the same time, valuations are becoming more stretched, central banks are tightening and political risks remain elevated. How can investors navigate this maturing bull market?
Global Investment Rebounds
Global growth is expected to remain robust and broad-based across countries. Citi analysts expect the global economy to grow 3.4% in 2018..
The Year for Cyclicals
Citi analysts expect global earnings growth of 9% in 2018. All major regions are forecast to post healthy earnings gains, suggesting another year of synchronized growth.
Navigating Rising Rates
With a number of central banks in the Developed Markets raising interest rates, Citi analysts believe that bond sectors which offer investors higher yield and strong fundamentals remain attractive.
Investment-Led Recovery Lends Support
Citi analysts expect higher copper, aluminium and iron ore prices in 2018. Positive drivers for oil may fade over the course of the year.
Dollar Has Peaked
The dollar is looking less attractive compared to the EUR, as the European Central Bank (ECB) is expected to adopt a less accommodative policy stance in 2018 and beyond.
Risks Remain Elevated
While political risks exist in various countries, they are unlikely to cause a synchronized and sustained sell-off in the financial markets as long as a global recession is avoided.
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