Nordic Equity Strategy
Carnegie’s summer edition of the Nordic Equity Strategy Report has been released and we believe that the Nordic equity market is on track for another strong performance.
Carnegie have identified five periods since 1880 with multiple expansion periods longer than 15 months on the US markets. The current environment shares many of the characteristics of these periods: strong earnings growth, low inflation, low or falling interest rates, and tightening corporate bond spreads or falling lending rates. The only key difference is the lack of strong economic growth. If this falls in place, there could be another year ahead with higher P/E values.The gradual economic recovery will continue, gaining speed in 2014–15.
The US and Europe will lead the way, while growth in emerging markets will be flat. Still low interest rates, ebbing fiscal austerity and improving real income growth are key growth drivers, along with stronger banks, rising asset prices and pent-up demand. Inflation will remain low and the first rate hike in the US will not come before the second half of 2015.