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National Bank on World Stocks: Upward Earnings Revisions For the First Time in 6 Yrs

National Bank (NA.TO) noted we begin 2017 with the MSCI AC trading at almost 16x forward earnings, the highest valuation at the start of a New Year since 2004. At that kind of multiple, the market driver in 2017 will need to be earnings growth rather than P/E expansion, it said. After all, it added, when the Fed is tightening, a P/E contraction is the norm.

According to National, the good news is that global economic momentum seems to be returning with some "pretty dramatic" impact on profit expectations. It noted earning revisions for the MSCI AC have actually turned positive for the first time in six years. That was also the time when we last saw the yield on the 10-year U.S. treasury move above 3%, it added.

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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