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On Friday, the stock market indices plummeted and marked the worst day on the Oslo stock exchange in over two years.
Extreme swings in interest rates have caused stocks around the world to collapse.
And there is more in store, we must believe the managers who are closely following the fight of central banks against the specter of inflation.
A number of other investors likely also spent the weekend examining the portfolio and evaluating how it will look in a world with rising prices and higher-than-expected interest rates.
It will take a long time
– The question is not whether we are heading into a recession, but how deep the recession will be and whether we will have some form of financial crisis and a major global equity shock, says Mike Riddell, portfolio manager at Allianz Global Investors, to the agency. Reuters Press.
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The sharp rise in central bank interest rates, so far and into the future, means Riddell believes it will take a long time for growth to pick up.
– We believe the markets are grossly underestimating the global blow to economic growth, he says.
Wall Street traders work in a falling stock market. (Photo: David L. Nemec / AP / NTB scanpix)
Tighter monetary policy has led more people to believe in a deeper recession than previously thought.
– Previously, we thought the recession would be short-lived and superficial. Now let’s dismiss this theory and think about what unforeseen consequences we will have as a result of a much tighter monetary policy, Mike Kelly of PinBridge Investments tells Reuters.
Will the US central bank follow?
Jake Jolly, investment strategist at BNY Mellon, believes the stock market will continue to fall before the low is reached.
– The market is getting closer and closer to the point where this recession is priced, but not yet priced, he says.
– We continue to be cautious, says Russ Koesterich, who heads Blackrock’s Global Allocation Fund.
– I think there is a lot of uncertainty about how quickly inflation will fall, there is a lot of uncertainty about whether the US central bank will actually implement such an aggressive tightening as reported this week, Koesterich told Reuters.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via links, which lead directly to our pages. Copying or other forms of use of all or part of the content may only take place with prior written permission or as permitted by law. For additional terms look at her.
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