05
Jan
USA : End of PE growth will weigh on S&P 500
Difficult to sustain US growth exceeding +3%. Pressures on corporate margins. Flattening of the yield curve. End of PE expansion. Caution on the S&P 500.
Key Points
- Difficult to sustain US growth exceeding +3%
- Upturn in inflation could be the surprise of the year
- Flattening of the yield curve
- Rise of the dollar after three years of consolidation
- Two more rate hikes in 2018
- Likely pressure on the evolution of corporate profits and margins for multinational companies
- Effects of tax reform already anticipated
- Likely disappointments in overall profit growth of the S&P 500
- Contraction of multiples during the interest rate rise phase
- Probable consolidation of equity prices
