Global recovery and valuations continue to favour stocks - Barclays
Barclays Wealth believes the global economic recovery can withstand the recent run up in oil prices as improvements in the labour market should outweigh the effects of higher oil prices on consumer sentiment. (Barclays Wealth does not expect oil to rise to $140-$150 a barrel.). Commodity costs are not a high enough portion of companies’ costs to derail the increase in corporate profits. Interest rates are slowly starting to normalise but this process is expected to be gradual, reflecting the pace of recovery, and posing little challenge to corporate profitability.