Entries in capital markets (1)


Stormy weather forecast for financial markets?

Capital markets can play an important role in mutuality, as a greater percentage of people become invested in them, and as they provide a supportive environment for social investments. In a recent outlook for Bloomberg View, consultant and portfolio manager A. Gary Shilling outlines why he believes global financial markets may face severe conditions in the near future (along with a handful of factors that have the potential to soften the expected market headwinds).

The stressors include:

  • Further fallout from Brexit;
  • Low oil prices (and weak demand); and
  • A global labor surplus.

He argues further that central banks are already taking extraordinary steps with monetary policy (quantitative easing and negative interest rates), to little effect. At some point these will spark a market correction, perhaps a significant one.

Still there are factors that may ameliorate some of these stressors, including the relative value of stocks compared to government bonds, and the potential for more infrastructure investment by the U.S. in the years ahead.

-- Catalysts