While we still think that corporate profits in the US will be squeezed by a tight labour market, we now think that the S&P 500 will tread water this year and next, rather than fall back significantly. Meanwhile, we have also revised our forecast for the German DAX in light of the fading of political risk in the euro-zone and the much-improved outlook for growth in region. We see it rising further, despite our expectation that the euro will be even stronger against the dollar by the end of 2018.
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