BofAML: Quién se beneficia más de los estímulos fiscales globales (Global Viewpoint)

Redacción - Miercoles, 24 de Agosto

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Global Viewpoint: The beneficiaries of global fiscal stimulus
•   Globally policy makers have started to ease fiscal policy, as a complement to ongoing monetary support for economic recovery.
•   The case for fiscal stimulus, particularly infrastructure and other supply-side growth enhancers, is compelling in our view.
•   Equities should benefit globally, both directly from spending and tax plans as well as indirectly via confidence and growth.

Fiscal policy eases back to the forefront

After several years of government belt-tightening, fiscal stances around the world have generally become more supportive of growth. Recently, the prospects for additional fiscal stimulus haveimproved in a number of countries. For example, Japan, Korea, and Canada have already announced stimulus plans, while our economists forecast fiscal easing is likely in the US and UK. These actions should benefit equity markets globally, not onlydirectly in certain sectors with lower taxes and higher spending, but also more generally through increases in GDP growth and confidence. Even without major new stimulus expected, fiscal policy remains modestly growth-supportive in the Euro area and China.

The case for fiscal stimulus

A persuasive case can be made for additional fiscal stimulus today in many countries, in our view. It can complement central bankers who have run low on tools and thus keep recoveries on track. A particularly strong argument can be madefor those fiscal policies that can help boost productivity and potential output, such as infrastructure investment and tax simplification, as underlying trend growth has slowed markedly around the globe. These are structural motivations, in contrast to the various countercyclical policies adopted in response to the global financial crisis. Today only post-Brexit UK may need some fiscal easing to counteract a looming cyclical downturn.

Rewards more than offset the risks

There are risks to fiscal easing as well: it could be mistimed, poorly designed, or subverted by special interests. But these are addressable issues, not intrinsic failures. With global yields continuing to decline and no sign of the bond vigilantes, it has never been cheaper for governments to fund investments in transportation and information infrastructure or training and education programs. Continued easy monetary policy and global investors' demand for defensive assets should mitigate any upward pressure on yields. As a result, we see limited risk of "crowding out" the private sector - indeed, many public investments should support expanded private activity. And after years of inflation running (well) below central banks' targets and market worries about deflation, any modest inflationary pressure from fiscal easing would be welcome, in our view.

Several equity sectors stand to benefit

In our view the most-discussed form of fiscal stimulus - additional public infrastructure investment - should return the greatest benefits to the industrial, materials and energy sectors, with potential spillovers into others. Additional spending on defense or public health care would be likely to aid those sectors. The sectorial consequences of tax reform depend on the specific changes made. For example, a repatriation tax holiday would most benefit those industries with substantial overseas cash holdings, such as US technology firms; a cut in VAT or personal income taxes might benefit consumer discretionary stocks the most.

 

See attached report for further information.

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