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Equities in 2017: Why We Expect More Upside Than Downside

Noting that “the populist revolution emerged just as the global economy was on the mend,” the head of Calamos Global Long/Short Team is encouraging advisors to think more positively about the global economy.

“Populism has always been associated with reflationary impulses and reflation is good for equities,” writes Michael Grant, Senior Vice President and Senior Co-Portfolio Manager. The timing was “downright lucky” for U.S. President Donald Trump, he adds.

In his just published commentary “Easing Global Headwinds Point to Higher Equities in 2017,” Grant details the team’s expectations for 2017, including:

Easing Global Headwinds Point to Higher Equities in 2017  
  • The U.S. economy is emerging from its mid-cycle slowdown. Reflation of the U.S. middle class could transform the U.S. durable cycle, Grant says. He expects more upside than downside for equities in 2017, predicting that drawdowns of more than 5% will be unlikely.
  • A few years behind the U.S., the eurozone is poised for a positive surprise—“European equities could comfortably outperform their U.S. counterparts this year,” according to Grant.
  • China is likely to struggle to adjust its growth model and “is a source of concern.” “The politics of trade are more of an issue for 2018, but the post-Cold War ‘free pass’ for China to develop its economy at the expense of the American middle classes is over,” Grant writes.

For more analysis including the team’s sector outlook, download the commentary.

Also, join us at 4:30 p.m. EST Wednesday, February 8, for “Pursuing Returns in a Post-60/40 World,” with Michael Grant. Register for the webcast at www.calamos.com/CPLIXwebcast.

For more information, please talk to your Calamos Investment Consultant at 888-571-2567 or [email protected].

This material is distributed for informational purposes only. The information contained herein is based on internal research derived from various sources and does not purport to be statements of all material facts relating to the information mentioned, and while not guaranteed as to the accuracy or completeness, has been obtained from sources we believe to be reliable.

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