by Macroview Economic cycles are desynchronised; monetary policies are also desynchronised and noncooperative; corporate earnings have been downgraded; and uncertainty has compressed valuation ratios. Concerns about China’s slowdown and the Fed’s impending interest rate rise have loomed especially large. The result has been volatile and shaky markets. However, the recent market correction has been driven by perceptions rather than reality. Economic fundamentals have not deteriorated and, indeed, remain reasonably robust in core economies. We think therefore that positive news in the coming months – from China, the US and Europe – could relieve negative perceptions and allow markets to rebound in the fourth quarter. Indeed, the rebound started at the beginning of October and is already well advanced.
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Christophe Donay considers the following as important: Macroview
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Economic cycles are desynchronised; monetary policies are also desynchronised and noncooperative; corporate earnings have been downgraded; and uncertainty has compressed valuation ratios.
Concerns about China’s slowdown and the Fed’s impending interest rate rise have loomed especially large. The result has been volatile and shaky markets.
However, the recent market correction has been driven by perceptions rather than reality. Economic fundamentals have not deteriorated and, indeed, remain reasonably robust in core economies.
We think therefore that positive news in the coming months – from China, the US and Europe – could relieve negative perceptions and allow markets to rebound in the fourth quarter.
Indeed, the rebound started at the beginning of October and is already well advanced.