In the next few days, the IMF will release its latest estimate for global economic growth. Yesterday, at an economic meeting in the southern French city of Aix-en-Provence, IMF Chief Christine Lagarde warned that the estimate is likely to be revised down a bit.
She noted that the global economic recovery was advancing at mainly three different speeds from an average 5.5% in emerging economies, to 2.0% in advanced countries like the US and Australia, to no growth in the dead-in-the-water economies of the euro zone. Lagarde said, “We therefore had a [global] growth forecast which was about 3.3%. But I am afraid when taking into account what we are currently seeing in the economies of the emerging countries in particular ... I am afraid that we are perhaps a little bit below.”
So why did S&P 500 forward expected revenues rise to another record high at the end of June? Those expectations drive analysts’ estimates for forward earnings, which is also at a record high. These 500 companies generate at least half of their sales overseas.
A closer look at the revenues estimates shows that analysts are expecting relatively anemic growth of 2.3% this year and 4.3% next year. Those estimates actually are weaker than the IMF’s forecasts of nominal world GDP growth rates of 5%-6% this year and next year. Other global economic indicators confirm that record highs are being set, but at a relatively slow speed.
Today's Morning Briefing: Three Speeds. (1) IMF chief sending smoke signals: Slower growth ahead. (2) Fast-growing emerging economies are slowing. (3) US is in second gear. (4) Europe is dead in the water. (5) Global economic indicators rising to record highs at slow pace. (6) S&P 500 forward revenues and earnings at record highs again. (7) BRICs hit a wall. (8) Germany remains stalled. (9) US looking great by comparison. (10) Overweight-rated S&P 500 Transports beating S&P 500. (11) Trucking index cruises to new high. (12) Earnings season line-up. (More for subscribers.)
She noted that the global economic recovery was advancing at mainly three different speeds from an average 5.5% in emerging economies, to 2.0% in advanced countries like the US and Australia, to no growth in the dead-in-the-water economies of the euro zone. Lagarde said, “We therefore had a [global] growth forecast which was about 3.3%. But I am afraid when taking into account what we are currently seeing in the economies of the emerging countries in particular ... I am afraid that we are perhaps a little bit below.”
So why did S&P 500 forward expected revenues rise to another record high at the end of June? Those expectations drive analysts’ estimates for forward earnings, which is also at a record high. These 500 companies generate at least half of their sales overseas.
A closer look at the revenues estimates shows that analysts are expecting relatively anemic growth of 2.3% this year and 4.3% next year. Those estimates actually are weaker than the IMF’s forecasts of nominal world GDP growth rates of 5%-6% this year and next year. Other global economic indicators confirm that record highs are being set, but at a relatively slow speed.
Today's Morning Briefing: Three Speeds. (1) IMF chief sending smoke signals: Slower growth ahead. (2) Fast-growing emerging economies are slowing. (3) US is in second gear. (4) Europe is dead in the water. (5) Global economic indicators rising to record highs at slow pace. (6) S&P 500 forward revenues and earnings at record highs again. (7) BRICs hit a wall. (8) Germany remains stalled. (9) US looking great by comparison. (10) Overweight-rated S&P 500 Transports beating S&P 500. (11) Trucking index cruises to new high. (12) Earnings season line-up. (More for subscribers.)
No comments:
Post a Comment