A fourth consecutive year of equity market declines cannot be ruled out, according to Mike Collins, ...
A fourth consecutive year of equity market declines cannot be ruled out, according to Mike Collins, head of asset allocation for Pictet Asset Management.
Collins said it is dangerous to exaggerate the impact of war concerns because this implies investors can expect to see a healthy rebound in the global economy when it is over, a scenario he thinks unlikely.
He added the threat of war is not solely to blame for January's stock market woes or the recent declines in consumer spending, noting economic data has been 'uncomfortably weak'.
'The limp, erratic recovery has been a far cry from the sustained global upturn many had expected to see,' he said. 'It is these harsh realities that have been the dominant influences on financial markets in January.'
Collins is alarmed by the tendency to draw parallels between the UK economy today and that of the late 1980s.
'While the phenomenal strength of the housing market is clearly reminiscent of the boom of the late 80s, inflation certainly is not, and this is critical,' he said.
'A fourth consecutive year of equity market declines simply cannot be ruled out, however rare a phenomenon and however unsavoury. Recent money supply data has been weaker, raising a warning flag for economic and stock market performance over the next three to six months.'
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