Industry Voice: US Equities - Will the bull market die of old age?

clock • 3 min read

At T. Rowe Price, we believe the fundamental underpinnings for equities remain positive and should support continued gains. Nevertheless, you may wish to temper your clients' expectations, as returns may be more muted and markets more volatile.

Adviser key takeaways

 

  • On balance, we remain optimistic on the outlook for both large- and small-cap stocks, although the US market will face some risks.
  • Continued economic growth, rising earnings, healthy consumer and business balance sheets, and lower taxes could support further market gains.
  • Technology and health care have outperformed, yet their relative valuations still appear reasonable and earnings projections remain strong.
  • However, your clients should temper their expectations for equity returns from the ageing bull market amid elevated valuations and peak profit margins.

 

Underlying economy appears supportive

The general economic backdrop remains constructive, with global growth improving. US economic growth has been sluggish, but a moderate expansion could extend the cycle. Consumer and corporate balance sheets and the housing market are generally healthy. Inflation remains tame for now. Business investment is improving. Read the T. Rowe Price 2018 Global Market Outlook

Important Information

This material is being furnished for general informational purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, and prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date written and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request. It is not intended for distribution to retail investors in any jurisdiction.

EEA—Issued in the European Economic Area by T. Rowe Price International Ltd, 60 Queen Victoria Street, London EC4N 4TZ which is authorised and regulated by the UK Financial Conduct Authority. For Professional Clients only.

T. ROWE PRICE, INVEST WITH CONFIDENCE and the Bighorn Sheep design are, collectively and/or apart, trademarks or registered trademarks of T. Rowe Price Group, Inc. All rights reserved.

 

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