[Thinking Ability] OECD Warns on Asset Wealth (2)
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Now, the theme this time isthe sequel to yesterday's OECD report.
Regarding OECD's global economic outlook, we introduced it in yesterday's article.
Today, we will delve into this outlook once again.
The point is that the growth rate is expected to peak in 2018.
In particular, Japan has already peaked in 2017.
Economic 2016 2017 2018 2019
World 3.1% 3.6% 3.7% 3.6%
United States 1.5% 2.2% 2.5% 2.1%
Euro area 1.8% 2.4% 2.1% 1.9%
Japan 1.0% 1.5% 1.2% 1.0%
China 6.7% 6.8% 6.6% 6.4%
United Kingdom 1.8% 1.5% 1.2% 1.1%
India 7.1% 6.7% 7.0% 7.4%
Brazil -3.6% 0.7% 1.9% 2.3%
The speed of Japan’s economic growth is expected to slow,
1) Corporate earnings are likely to continue growing.
In other words, EPS will rise.
2) On the other hand, the growth rate will slow down.
During a phase of accelerating growth, profits rise rapidly, so a high P/E is not unusual.
Conversely, if growth slows, a high P/E cannot be justified.
What do you think?
In other words, if EPS grows, stock prices tend to rise accordingly.
On the other hand, if growth slows, the logic of P/E around 14.83x (as of November 29) exceeding 15x, rising to 16x or 17x becomes questionable.
With earnings reports largely completed, the magic phrase is "drill-drill-drill strategy" after all.
Note) The above is my personal view, and is intended solely to improve financial literacy. It is not for investment solicitation. Also, while the blog content is based on data from reliable sources, the administrator does not guarantee its accuracy. Please make final investment decisions at your own risk.
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