Market roundup | Developed economies to lead global trade recovery

Developed economies’ export to double from 2016 levels, says WTO. In other news, analysts around the world have been upgrading their corporate profit forecasts for 2017


Graphic: Subrata Jana/Mint
Graphic: Subrata Jana/Mint

Developed countries are forecast to lead the global trade recovery. The World Trade Organization (WTO) estimates global trade to expand 2.4% in 2017, up from 1.3% in 2016. Compared to the previous year, most regions of the world are forecast to register better growth in 2017, reflecting recovery in the global economy.

Developed economies are expected to see higher growth in trade, provided the policy actions do not take a turn for the worse, WTO said. Developed economies’ exports growth will double from 2016 levels, it said. Exports growth of developing economies is seen to improve from 1.3% in the previous year to 2.2% this year.

Corporate profit forecasts for 2017 rising globally

Around this time of the year, analysts are usually busy trimming their overly optimistic corporate profit forecasts. Not this time. With the return of inflation and improving economic growth, they are instead upgrading their 2017 estimates for earnings around the world. Positive revisions are outnumbering negative ones, according to data compiled by Bloomberg, which bodes well for equities in the coming months. The upgrades are uncommon, say JPMorgan Chase and Co.’s Emmanuel Cau and Mislav Matejka, especially since consensus projections at the start of the year were already elevated.

First-quarter earnings are expected to rise 15% for European companies, 9% for those in the US and 16% for Japanese firms, the equity strategists wrote in a 10 April note. Despite the high expectations, JPMorgan sees scope for positive surprises in the forthcoming earnings season, saying that corporate pricing, operating leverage, commodity prices and credit conditions were all supportive during the three-month period. Bloomberg

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