Geopolitical developments will increasingly shape the global economy and how investors allocate capital. We look at two companies primed to benefit from increased defense spending in key parts of the world.
A return to a more traditional US economic cycle would be good news for stocks as stronger growth and inflation drive pricing power, revenue growth and higher valuations. But watch these three signals to see if the economy backtracks.
President-elect Donald Trump’s plans for a massive fiscal stimulus via tax cuts and infrastructure spending should extend and perhaps accelerate a lackluster economic recovery that had started to peter out. With the economic outlook improving and inflationary pressure on the rise, this stimulus could give the Federal Reserve the leeway to hike interest rates at a faster pace than previously expected.
Demand for economic growth from both politicians and the electorate is growing, leading to increasing talk and some planning for major infrastructure projects. The move here is to focus more on the companies likely to benefit than a macro story that lifts the entire area.
US oil production appears to be bottoming, but investors seeking to profit in an environment where prices will likely range between $40 and $60 per barrel must pay attention to basin-specific trends as well as companies’ balance sheets and acreage quality.
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