Outlook for Investment Markets
World and local equity markets had a difficult month, partly because the US Fed hinted it might start unwinding the bond buying that had kept bond yields very low, partly because shares had arguably risen too fast in earlier months, and partly on other grounds (Chinese growth, Japanese delivery of stimulus, Eurozone weakness). While lower share markets might appear to signal gathering global storm clouds, a more likely scenario is that global growth prospects are still reasonably good. The bond markets, however, face more challenging conditions as and when the Fed eases back on supporting bond prices. At home, economic data have been strong, and local equities should benefit from the upswing currently underway.
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