At T. Rowe Price we believe equity valuations above historical averages in most developed markets do not necessarily mean that global equities are overvalued. Equity risk premiums in many markets still appear reasonable.
key points
- Innovation and disruptive change continue to benefit a relatively small group of mega-cap companies.
- For the first time since the global financial crisis, the world economy is in a synchronized expansion, driving steady earnings growth in most markets.
- Barring unpredictable political or economic shocks, the global earnings recovery should continue in 2018.
- Whether recent low market volatility persists in 2018 remains to be seen, but we do not believe low volatility in itself means a market correction is near.
Waves of change boosting selected mega-companies
We expect the waves of disruptive change in global equity markets to accelerate, fed by a powerful combination of technological innovation, changing consumer preferences, and evolving business models. These forces are upsetting the competitive balance in existing industries while at the same time spurring rapid growth for new products and services. Read the T.Rowe Price 2018 Global Market Outlook
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