GLOBAL - Notwithstanding market concerns about pricing power, the US corporate sector should deliver a robust increase in profits in 2002, according to Keith Wade, Schroders' chief economist.
Schroders’ forecast is for economic profits to rise just over 15% in 2002 (q4/q4). At the market level (S&P500) this roughly translates into operating earnings per share of $46.5 (20.3% y/y) and reported earnings per share of $36 (up 45% y/y).
Whether this will satisfy the expectations built into markets is debatable, although by the time the figures are reported analysts will be looking on to 2003.
AXA Investment Managers’ Nigel Richardson commented on AXA IM’s increased overweight position in equities. He said: “Our increased conviction of a synchronised global recovery has been supported by further evidence from leading indicators suggesting a growth trajectory that could attain at least 3% by 2003 in the US, Europe and Asia (ex-Japan).”
However, regarding equities, State Street global Advisors, in its latest market commentary, says investors are “as changeable as new England weather.”
SSgA predicts “a rather erratic market until the economy stabilises and corporate profits materialise.”
By Luke Clancy
In this week's Pensions Buzz survey, we want to know whether or not you agree with Lord Myners' opinion that asset owners, such as pension funds, are substantially to blame for short-termism in business.
The combined funding level decreased by just over four percentage points by the end of last month to 93.6%, according to the Pension Protection Fund's (PPF) latest update.
Plastics manufacturer Carclo has missed yet another dividend as it continues to battle its defined benefit (DB) pension funding shortfall.