US outlook 2017
By David Page, Senior Economist (US and UK) - AXA IM
The election of Donald Trump as 45th President of the US looks likely to have a material impact on the outlook for US activity over the coming years. While acknowledging the significant policy uncertainty, David Page reviews the expected outlook for 2017.
Why rates are going to rise, or why secular stagnation is an over-rated concept
by Laurence Boone, Chief Economist & Head of Research and Investment Strategy
My conviction as AXA Chief Economist is that 2016 was the year marking the end of the fear of even lower interest rates, and a new hope of a progressive rise of rates, even if not to the past prevailing pre-crisis levels. Secular stagnation (the prolonged period of low interest rates and low growth) is an over-rated concept!
We argue that growth and inflation are back.
2017 Outlook: Higher interest rates and growth set to return
by AXA IM’s Research & Investment Strategy & colleagues
2016 marked something of a shift in investors’ attitudes towards the economic and financial outlook. Looking ahead into 2017, we believe that the prevailing fears over secular stagnation – this prolonged period of low interest rates and low growth - are now overdone.
Ultimately, going forward, we feel this backdrop will improve, as will investment returns.
While recent years have certainly been characterised by low growth, this does not mean it is the global economy’s fate. In fact the favourable combination of policies, technological progress and demographics should together offset and eventually reverse this trend.
As such we believe this is positive from an investment perspective. Opportunities will return once risk premia have moved back towards more normal long-term levels - and we expect the latter to happen within five years. In the meantime we believe that active management, investment into alternative asset classes like real estate and even emerging markets (EM) - provided the US refrains from implementing punitive trade policies - will help investors.
Below we highlight 8 trends to watch out for in 2017 and beyond