Strong Corporate Profits to ‘Gather Momentum’ in Second Half

Stock market growth in the U.S. and globally tracked overall growth, according to Chris Hyzy, chief investment officer for Bank of America Global Wealth & Investment Management.

Hyzy said in a midyear video update on the economy, markets and Washington that the markets’ focus on corporate profits drove growth in the first half of the year.

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“Our view is that the profit cycle is the bedrock to this expansion,” he said in the video. “We expect the profit cycle in the United States and globally to continue to gather momentum. It may slow down off of the first-quarter hyper-growth that we saw in terms of 15% in the United States, but slowing down isn’t necessarily a bad thing when you look at the full trend.”

He expects interest rates and equities to rise, with non-U.S. growth bringing a “surprise to the upside.”

Karin Kimbrough, head of investment strategy for Merrill Lynch Wealth Management, noted that consumers and businesses are more confident, not just in the U.S. but globally.

Kimbrough believes the Fed will raise rates one more time this year, and is “looking for another round of three rate hikes next year in 2018, if all goes … according to plan.”

Kimbrough noted her growth expectations are even without “heroic changes in Washington.”