Global stocks set for gains, not fireworks, in months ahead: Reuters poll
By Hari Kishan, Indradip Ghosh and Sarupya Ganguly
BENGALURU (Reuters) — The recent rally in global stocks has only a little further to go given last year's unexpectedly sharp run-up, according to a Reuters poll of equity strategists who were evenly split on whether there will be a correction in the next three months.
Starting in late 2023, the rally has pushed many indices close to lifetime highs and in some cases to new records on now-extinguished expectations that the U.S. Federal Reserve would start cutting rates as early as next month.
Although rate cut bets have been tempered, indexes have continued to gain on strong earnings and booming tech stocks, even as bonds have retreated.
The poll of around 150 equity analysts taken Feb. 9-22 showed all 15 major stock bourses surveyed were expected to rise this year, but only three were expected to gain more than 10%.
By comparison, only two failed to rack up double-digit percentage gains in 2023.
«We believe investors should be open-minded that there is a scenario in which rates need to stay higher for longer, and the Fed may need to tighten financial conditions,» said global markets strategists at JPMorgan in a recent note.
Still, they added that the more than 20% rally in U.S. stocks since October «did not correct at all» despite the shift in rate expectations, saying that volatility was unusually low.
«Investor positioning has increased significantly over the past few months, which may present an increasing headwind for the market,» they noted.
While higher-for-longer interest rates could cap gains, strong corporate earnings are likely to cushion stocks from any major falls despite high valuations.
A more than 85% majority of analysts, 71 of 83, who answered a
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