Fiduciary Trust International: Global Opportunities, at Home and Abroad

Fiduciary Trust International: Global Opportunities, at Home and Abroad

Chamber Member News Post Date: 06/28/17 Source: Fiduciary Trust International By: Fiduciary Trust International


The global economy continues to improve, with better-than-expected earnings in the first quarter, stronger GDP data and political stability across many developed and emerging markets. These improvements have broad implications for equity investors: Over the next several years, it appears that the most attractive returns could come from markets outside the US, especially regions that have recently crossed the threshold from economic contraction to expansion.

Opportunities at Home:

In the US, we have been seeing improvements among companies with broad international exposure. In fact, the S&P 500 is dominated by multinationals that earn an average of 40% of their profits outside the United States. For example, the industrials sector saw improvements in sales and profits thanks to an uptick in manufacturing, more stable oil prices and stronger demand from emerging markets.

Another beneficiary of global economic growth could be the tech sector, which has broad exposure to the global economy. The Philadelphia Federal Reserve reported recently that nearly 52% of manufacturing firms intend to increase their capital expenditures this year, with more than a third of those companies citing the need to modernize their information technology systems as a motivating factor. Government spending, which has been constrained for years, could provide an additional lift. In May, President Trump issued an executive order to begin modernizing IT systems in government agencies. Read Full Article