Even as stock price volatility has increased in 2018, the U.S. equity outlook remains fundamentally sound. Strength in corporate profitability is broad-based, with nine of the eleven sectors in the S&P 500 currently forecast to post double-digit earnings gains this year.
There are risks to our outlook: potential interest rate increases; wage pressures; trade tensions; geopolitical conflicts; domestic political upheaval. We also consider risks that might arise from environmental, social or governance factors, particularly for the technology and finance sectors.
While acknowledging these risks, our 2018 equity outlook remains unchanged. We continue to believe that strength in corporate profits will offset any pressures on P/E multiples, so that stock prices are likely to end 2018 with gains of 5-10%.
Read our full analysis here.
Michael Geraghty is the Equity Strategist at Cornerstone Capital Group. He has over three decades of experience in the financial services industry. Michael has worked as an investment strategist at a number of leading firms. At PaineWebber (1988 – 2000), he was a Senior Vice President and member of an Institutional Investor ranked U.S. Portfolio Strategy team. At UBS (2000 – 2003), he was an Executive Director and senior member of the global equity strategy team responsible for regional and sector allocations. At Citi Investment Research & Analysis (2004 – 2012), Michael was the global themes strategist; Citi was ranked #1 for Thematic Research in the 2011 Extel survey. Michael holds a Master’s degree in Economics and a Masters of Business Administration in Finance from Columbia University.