August markets: Another false warning?

NEARING CRUNCH POINT

clock

Investec's Max King says equity markets are no longer a reliable economic indicator and forecasts a breakup of the eurozone.

The economist Paul Samuelson once pointed out that Wall Street had confidently predicted nine out of the last five recessions. The August drop in equity markets, similar in scale to that seen a year ago, has resulted in what, in our view, is more likely to prove to be another false warning. The last 11 years have contained two of the worst four bear markets since 1900 so it is no surprise that investors have become highly risk-averse, rushing for the exit at the first sign of trouble. Equity markets have therefore become an even less reliable leading economic indicator. We note: ...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Investment

Partner Content: Is the interest rate descent the time to harvest bonds?

Partner Content: Is the interest rate descent the time to harvest bonds?

Markets expect interest rates to fall this year, offering investors the strongest opportunity for fixed income seen for a long time. Watch this video podcast to learn how best to harvest this exciting opportunity.

Sarka Halas
clock 28 March 2024 • 1 min read
Partner Insight: How effective are impact investments?

Partner Insight: How effective are impact investments?

Impact investing has transformed over the past decade, giving investors the opportunity to pursue both financial returns and social and environmental outcomes.

Sarka Halas
clock 27 March 2024 • 2 min read
Partner Insight: High-yield investors should keep a close eye on the default cycle

Partner Insight: High-yield investors should keep a close eye on the default cycle

As central banks start to think about cutting interest rates, forecasts for a peak in credit default rates are not far behind — and could happen sooner than expected, says Wellington Management’s Alex King.

Sarka Halas
clock 27 March 2024 • 2 min read
Trustpilot