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November 7, 2017 | Global Equity
Looking Ahead

Global Equity Strategist

Olga Bitel, partner, is a global strategist. She is responsible for economic research and analysis across all regions and sectors. She distills macroeconomic and geopolitical developments into actionable insights for global equity portfolios within a multifaceted strategic framework. In addition, she provides insights about cyclical turning points and structural trends as inputs into portfolio construction in predominantly bottom-up investment approaches. Before joining William Blair in 2009, Olga was a senior economist at the National Institute of Economic and Social Research in London, United Kingdom, where she produced macroeconomic forecasts for most Asian economies and led thematic research projects for some of the world’s best-known international organizations, including the Organization of the Petroleum Exporting Countries and the International Monetary Fund. Olga received a B.A. from the University of Chicago and an M.Sc. in economics from the London School of Economics and Political Science.

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The latest data indicates that ongoing economic expansion is gathering pace, especially in the euro area. See my recent post, Macro Scorecard Points to Economic Expansion. At the same time, wage growth remains modest across most developed markets, and this is beginning to restrain consumer behavior.

In the third quarter of 2017, retail sales volumes growth decelerated across all major developed economies. In regard to corporates, top-line growth is currently in the range of 6% to 10% per annum; it is not meaningfully higher across emerging markets.

Beyond improving corporate performance, the outlook for the remainder of this year remains relatively benign, as major national elections, especially in Europe, produced outcomes favorable for continued growth.

From a global strategy perspective, we continue to see upside potential to nominal growth in select companies and industries, as expectations do not appear extended.

We do not expect the unfolding gradual withdrawal of monetary policy stimulus to be detrimental to growth either in the United States or the euro area, where policy action is not expected until 2018.

Corporate performance is likely to be stronger in Europe and Japan because economic expansion in the United States is relatively more mature.

Finally, emerging markets are well positioned to participate in the ongoing global expansion and valuations remain relatively favorable (see charts below). Recent U.S. dollar strength is unlikely to dampen the fortunes of corporates in emerging markets materially.

A direct investment in an unmanaged index is not possible. Past performance does not guarantee future results.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance of developed markets.

Global Equity Strategist

Olga Bitel, partner, is a global strategist. She is responsible for economic research and analysis across all regions and sectors. She distills macroeconomic and geopolitical developments into actionable insights for global equity portfolios within a multifaceted strategic framework. In addition, she provides insights about cyclical turning points and structural trends as inputs into portfolio construction in predominantly bottom-up investment approaches. Before joining William Blair in 2009, Olga was a senior economist at the National Institute of Economic and Social Research in London, United Kingdom, where she produced macroeconomic forecasts for most Asian economies and led thematic research projects for some of the world’s best-known international organizations, including the Organization of the Petroleum Exporting Countries and the International Monetary Fund. Olga received a B.A. from the University of Chicago and an M.Sc. in economics from the London School of Economics and Political Science.

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