The first half of reporting season kicks off in earnest early February, and according to the latest Thomson Reuters earnings estimates, EPS for the S&P/ASX200 is forecast to grow by 7.0% in FY18, down from 11.3% in FY17. This pace of growth is forecast to continue over the following two years (FY19: 5.9%, FY20: 5.2%) providing a platform for steady equity returns, with stronger global growth and improving business conditions offering the upside.
Positive business and consumer sentiment sets the tone for reporting season and investors have responded by putting capital to work. The European resurgence and the Trump-led economic reforms in the US are poised to continue to buoy the ASX, in particular offshore earners. While Australian economic growth is improving, offshore markets continue to set the pace for an economic rebound.
Read the full Morgans monthly Investment Watch update
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