Author: Alastair George
Consistent with the weakness in global PMI survey data, we find that a weakening trend in 2019 earnings forecasts has taken hold. We recognise that for many investors corporate fundamentals will matter less than the near-term direction of monetary policy at the present time. However, slowing economic growth does appear to be having a detrimental effect on profits momentum. On an unweighted basis, 2019 forecasts are now 10% lower than a year ago in the UK and eurozone and nearly 15% lower in emerging markets. The US has held up better with a 3% decline in earnings forecasts over the same period.