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3 Apr 2015
Weak US GDP coincides with fresh decline in global EPS growth – BAML
FXStreet (Barcelona) - Strategists at BofA-Merrill Lynch, share that the soft GDP growth in US has coincided with the weakening of global EPS growth, rekindling fresh concerns for global growth.
Key Quotes
“GDP growth in the Euro-area (roughly 2%) is likely to have been stronger than GDP in the US in Q1 (roughly 1-1.5%) for the first time since 1Q14.”
“The weakness in US GDP was presaged by a sharp drop in BAML's US “surprise index”, currently down 22% (thus consistent with a 35bp drop in 10y bond yields in the past 3 months).”
“And weak US growth coincided with fresh declines in global EPS growth. Forward global EPS down 11.3% since Jul’14 peak; energy -53%, but broader notable deterioration in staples -11%, industrials -8%, financials -7%, also.”
“And as EPS slows, the question of how such an unprecedented era of monetary policy easing has led to such a timid recovery in global growth is again rekindled.”
Key Quotes
“GDP growth in the Euro-area (roughly 2%) is likely to have been stronger than GDP in the US in Q1 (roughly 1-1.5%) for the first time since 1Q14.”
“The weakness in US GDP was presaged by a sharp drop in BAML's US “surprise index”, currently down 22% (thus consistent with a 35bp drop in 10y bond yields in the past 3 months).”
“And weak US growth coincided with fresh declines in global EPS growth. Forward global EPS down 11.3% since Jul’14 peak; energy -53%, but broader notable deterioration in staples -11%, industrials -8%, financials -7%, also.”
“And as EPS slows, the question of how such an unprecedented era of monetary policy easing has led to such a timid recovery in global growth is again rekindled.”