Global Stocks Bounce 33% in 12 Months

It has been a profitable time for equities, but going forward investors should retain perspective and discipline. The uncertain backdrop is likely to persist for some time

Dan Kemp 3 February, 2017 | 9:38AM

Over the past 12 months we have witnessed a remarkable shift in the state of the world, with Donald Trump’s election and Brexit headlining a series of developments that has the potential to affect market sentiment for years to come. In order to appreciate the change, we only need to rewind the clock to February 2016.

There were Chinese debt concerns, an earnings recession in large parts of the world, rising default rates, the threat of deflation and the oil price was less than $30. We now have an oil price comfortably above $50, China seems healthy, default rates are rapidly decreasing, and robust earnings growth and inflation expectations are growing by the day.

If we take the liberty to look at the leader-board over this period, we can see the turn of health in action. In fact, global shares increased by approximately 18% in US dollar terms and as much as 33% in pound sterling terms. Emerging markets and developed markets have both contributed positively, with commodity-linked markets such as Brazil and Russia performing particularly strongly.

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About Author

Dan Kemp

Dan Kemp  is Chief Investment Officer, Morningstar Investment Management EMEA

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