Merrill skriver i en omfattende økonomisk og finansiel analyse, at kursfaldene på markedet i september kun er en korrektion. Merrill ser tegn på en solid forbedring af den amerikanske økonomi, bl.a. med produktivitetsstigninger og høj indtjening i udlandet, at det vil opveje tabet på aktiemarkedet i september. Den kaotiske valgkamp og centralbankens bekymring for økonomien skal ikke overvurderes, mener Merrill. Den internationale handel vil næste år blive den stærkeste i tre år, vurderer Merrill. En ny global ekspansion er på vej.
Stock Market Jitters Likely To Prove Just a Correction
Led by a relentless rally in a narrow set of large technology companies since the late March shutdown, the increasingly overextended U.S. equity market
became highly vulnerable to a correction as the typically volatile presidential election season approached.
Fed Chair Powell himself has been outspoken about his belief that more fiscal
stimulus is critical for achieving the Fed’s forecast for further declines in the unemployment rate. While this has raised concerns about the outlook we believe that the outlook is more robustly positive than the equity-market drop and dollar appreciation of the past few weeks seem to suggest.
Leading indicators continue to suggest a positive growth dynamic ahead. The U.S. Institute for Supply Management (ISM) manufacturing index new-orders component remained strong in September despite some moderation from a 16-year high in August, and the global IHS Markit survey manufacturing index reached a two-year high, strongly suggesting continued manufacturing sector growth ahead.
Given the close link between global manufacturing and trade cycles in today’s globally integrated economy, it is not surprising that international trade has already recovered much of its precipitous 18% year-over-year May drop, with a swing to positive growth of +3% to +4% likely by early 2021, in our view, which would be the strongest in three years.
With high operational leverage and productivity growth likely to fluctuate around a stronger trend, in our view, we expect margins to start expanding again from already elevated levels.
Stronger productivity growth and rising margins are important reasons
behind our view that the U.S. economy will continue to surprise to the upside, with pre-tax GDP profits likely up by mid-double digits next year.
Overseas profits will likely contribute to profits reaching new highs in coming quarters if our outlook for sustained global economic normalization and a softer dollar prove correct.
All in all, we believe that the September equity market swoon is a typical seasonal correction in a secular bull market driven by the new synchronized global expansion.
