Christmas after Christmas
Jacques Henry, Head of Equities at Pictet Wealth Management.
- Our forecast is for low- to mid-single digit growth in developed-market stocks’ revenues in 2024 as nominal GDP growth is expected to remain positive.
- Margins are expected to remain fairly resilient as long as inflation decreases in an orderly way.
- After including buybacks, we expect earnings per share in the mid-single digits in 2024.
- Equity valuations could remain rich (in absolute terms and relative to fixed income), especially in the US, as earnings momentum is not expected to plummet and tightening refinancing conditions will bite only gradually.
- We see European stocks as providing the highest cash returns to shareholders. Dividend yields on Japanese stocks should outpace those in the US.
- Japanese equity valuations are already pricing in further improvements in sentiment, driven by incentives for companies to engage in buybacks and for domestic retail investors to invest in stocks tax free.
- The recent end-of-year rally has sent equity indices prices close to or above our end-2024 price targets. These targets will be reassessed as more data come in over the coming months.
