Charts to Watch in 2018: Profits

To begin 2018, we’ll highlight various charts to watch for the upcoming year. We’re kicking things off today with one of the key drivers of long-term equity performance: profits.

2017 was the first year since 2010 to see positive earnings growth in the S&P 500 Index, foreign developed markets, and emerging markets. This broad-based strength in global earnings helped spark a global rally, as the MSCI ACWI (All Country World Index) gained 24%, with many emerging market countries gaining even more.

Per John Lynch, Chief Investment Strategist, “The big question many are asking is whether there’s room for stocks to continue to go higher in 2018 given the large gains we saw last year. When you look at the extent of corporate earnings growth globally, we think last year’s gains were justified, and believe that we could be looking at the first time since before the Financial Crisis that we will have back-to-back years of positive earnings out of the United States, foreign developed markets, and emerging markets. That is a nice backdrop for continued higher prices globally.”

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