Strong fundamentals leave bull market intact

Here's what we're thinking

November 21, 2017

Global markets grinded higher over the past month notwithstanding a bout of profit-taking in recent days. Economic reports around the world continue to point to solid growth momentum with 2017 on pace to post among the best global GDP growth rates since 2011. Economic momentum has broadened out to the four corners of the world over the past year with every major economy posting positive growth, reflecting a sturdier global recovery phase. This has translated into solid double-digit corporate earnings growth in the third quarter once the insurance sector has been excluded following its large, hurricane-related losses. Having avoided a correction in excess of 5% since February 2016, the S&P500 equity index has experienced an unusually long stretch without a meaningful pullback, leaving on the table some potential for transient profit-taking at some point.

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