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PGIM Investments: Step-up in growth in secular areas should persist
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Investors are facing a complex landscape heading into year-end. Interest rates are responding to elevated wage and goods price inflation, exacerbated by supply-chain bottlenecks and shortages of critical components. While the direct disbursement of fiscal stimulus is winding down, liquidity remains abundant, sustaining high levels of demand and contributing to inflationary pressures. GDP growth expectations have moderated in recognition of these supply constraints, although growth should continue to outpace pre-pandemic levels in the short term. We expect corporate profit growth to return to pre-COVID-19 trend levels over the course of next year. While these levels are respectable in absolute terms, they represent a meaningful slowdown from the COVID-driven highs reached over the past 18 months.

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