Asset Allocation Strategy
Global Earnings Cycle Provides Support Amidst Uncertainty
Mon 28th February, 2022

While equity markets remain on edge over the outlook for global inflation and more recently the Russia Ukraine situation, the robust global earnings picture continues to provide a degree of underlying support to the equity market outlook.

With US, European, and Australian earnings seasons now winding up, consensus earnings estimates have once again edged up over the past month.

Recent global results for the final quarter of 2021 show earnings growth for 2021 was very strong, in part due to easy comps driven by the onset of the pandemic in 2020, along with the strength of the global growth recovery.

Significantly slower growth is expected in 2022, with earnings comps tougher, economic growth slower, and cost pressures widespread. However, with global economic growth still expected to proceed at an above-average pace, we still see the prospect for the earnings upgrade cycle to extend in 2022. In this report we cover:

  • All major regions still in upgrade mode
  • The Russia/Ukraine impact
  • Sector earnings trends
  • Earnings remain a bullish support despite the wall of worry

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Written by

David Cassidy, Head of Investment Strategy

David is one of Australia’s leading investment strategists.

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