Heading into 2018, the S&P/ASX 200 Index is trading at almost a decade-high level and forecasters are reasonably bullish on the outlook for the benchmark. Commodity prices enjoyed a year-end rally and provide a steady buffer for 2017-18 earnings. “The economy has steadily improved over the last six to nine months, that improvement hasn’t been readily recognised,” says Dion Hershan, head of Australian equities at Yarra Capital Management. “Corporate capex is picking up, you can see it in confidence numbers as well. There’s been a marked improvement in the economy, which is critical.” Hershan has also seen a positive turn in the earnings cycle. “We’re heading into 2018 frankly with a bit of resilience.”

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