2018 is likely to be an unusual year for markets. So far in 2017, the MSCI world index is up some 18% and stands on a P/E of just over 21x. We are now in the 9th year of the bull run since the trough of 2008. By all traditional measures, market participants would expect a correction at some stage, and the question would be whether it would be what we in Hermes term a black bear (traditionally the less aggressive of the species) of circa 25% as in 1957, 1962, and in 1978; a brown bear (the more aggressive of the species) of circa 45% as in 1973, 2001 and 2008 or a mere correction of anywhere between 5% and 17% as in 1956, 60, 66, 77, 81, 90, 2008 and 2011.
Please see below for a collection of 2018 outlooks from Hermes Investment Management’s senior executives, investment office as well as equity, fixed income, private markets and stewardship teams.
The impact of ECB tapering on European markets