RUNNING uphill, swimming against the tide – choose your metaphor for today’s investing environment.
For the year ahead, momentum is waning slightly, but at 7% expected earnings growth, down from 9% at the start of the year, it still looks good enough as long as valuations stabilise, the Fed goes no faster than expected and inflation starts to ease in the summer.
If earnings do grow by 7%, and we assume that valuations have a bit further to fall, then this might be a year of 5-6% stock market growth.
At close to $90 a barrel, Brent is now more than four times the level it reached at the worst of the pandemic lockdowns in early 2020.
It’s true – a bad first month does tend to lead to lower returns for the year as a whole than a strong one.
Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only.
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