Outlook for Investment Markets
2016 has started badly for many asset classes, with global equities of all kinds sold off heavily worldwide, but especially in the emerging markets. The main concerns have been the potential impacts of slower Chinese economic growth and falling commodity prices. Government bonds have benefited as investors have sought refuge from the equity sell-off, but lower-quality bonds have weakened as investors have become more risk-averse. Looking ahead, the most likely outlook is for continued modest global economic growth, which should provide some floor support to global shares, though there is a risk that investors could remain too anxious to invest and could set off a further cycle of self-fulfilling selling.
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