Shares Sliding Again – What’s Driving It and is There Any Light at the End of the Tunnel?
The attached note looks at the renewed weakness in share markets. The key points are as follows:
- Share markets remain under pressure from high inflation, rising rates & bond yields and the rising risk of recession and the threat that poses to company profits.
- With the rising risk of global recession, global and Australian shares are at high risk of further falls in the short term.
- However, it’s not all negative. Pipeline inflation pressures are continuing to decline and inflation expectations remain relatively low which should enable central banks to become less hawkish from later this year. Share market seasonality also improves into December and the direction setting US share market normally sees strong gains after mid-term elections.