Rudi’s View: Outlook Positive, Australia Lagging

Rudi's View | 4:28 PM

The outlook remains positive, global equity strategists maintain, though Australia will be among the world's laggards.

By Rudi Filapek-Vandyck, Editor

Consumers worldwide are feeling the pain from higher oil prices, as also witnessed in recent market updates by ASX-listed companies, but economic recessions should still be avoided as the positives from a cyclical upturn and significant spending on AI infrastructure provide plenty of offsets.

In contrast with prior oil price shocks, corporate earnings in key regions are accelerating, not shrinking, creating a positive undercurrent against today's headwinds and uncertainties.

To illustrate their ongoing positive outlook, strategists at Morgan Stanley have raised their next twelve month's target for the S&P500 to 8300, implying yet another year of double-digit return (11.5%) is most likely.

Jeff Schulze, head of economic and market strategy at Franklin Templeton's ClearBridge Investments, is equally positive on the outlook for equities in the US (and worldwide).

Schulze is the author behind ClearBridge's US Recession Dashboard which as at the end of April is hardly flashing any warning signals.

In fact, there are fewer warnings now than at the end of December, indicating the US economy is progressing into stronger underlying momentum, despite war in the Middle East and vulnerable consumers exposed to higher fuel prices.

Solid US Momentum

Schulze is currently visiting Australia to communicate ClearBridge's strategy and insights to local investors and the media. Morgan Stanley just updated its prognostications for the six months (and more) ahead.