An increasing number of global fund managers are becoming optimistic about a revival in corporate earnings. Around 69% of respondents see global profits improving over the next 12 months, showed Bank of America Merrill Lynch’s latest survey of fund managers. This is the highest level since December 2009, said the survey report.
Besides, for the first time since February, more respondents said that the global economy is in an early-cycle phase rather than a recession, showed the survey. Improvement in economic outlook usually trickles down to earnings estimates, according to Goldman Sachs. “Our economists have recently made upward revisions to their economic forecasts and it is likely that analysts’ expectations will follow. This is typically what we see in the early stages of a recovery from a bear market," it said in a report on 7 September.
