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ECONOMICS: National Bank on Global Equities

National Bank (NA.TO) in its Monthly Equity Monitor for October 2015 noted global equities continue to struggle. In Q3, the MSCI AC index was down for a second consecutive quarterly decline, a first in four years. A deteriorating earnings backdrop is exacerbating the downward pressure on the index, it said.

National said it still thinks earnings growth is possible in 2016, provided of course that a few things go right. First, the global economy needs to "get out of its funk." It noted that after a challenging first half of the year, world industrial output is picking up. Otherwise, National said, USD appreciation needs to be kept in check to break the disinflationary trend that is currently dogging the earnings outlook. It added: the threat of a Fed rate hike notwithstanding, there are policies that could offset USD strength. One would be to include the Chinese yuan in the IMF's basket of reserve currencies.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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