subscribe to our newsletter sign up

Likelihood of a short-term market correction increasing

Shane Oliver, AMP Capital, Mueller inquiry, market correction, australian shares, australian equities,

A number of global economic factors have set the stage for a possible correction in share market prices, according to an expert.

Political risks in the US, such as the Mueller inquiry into whether president Donald Trump colluded with Russian authorities to advance his election campaign, pose a threat to share markets, AMP Capital chief economist Shane Oliver has cautioned.

“Political risks in the US have escalated a bit with the Mueller inquiry intensifying and the need to avoid a government shutdown and raise the debt ceiling next month which will likely see the usual brinkmanship ahead of a solution; the risks around US-China trade seem to be increasing; North Korean risks remain; and we are in the weakest months of the year seasonally for shares,” he said.

Mr Oliver noted that Australian shares have already seen a 5 per cent correction since hitting highs in May, but warned they are still vulnerable to a pullback in global or US markets.

“However, with valuations remaining okay – particularly outside of the US, global monetary conditions remaining easy and profits improving on the back of stronger global growth, we would see a pullback as just a correction, with the broad rising trend in share markets likely to resume through the December quarter and into 2018,” he said.

Likelihood of a short-term market correction increasing
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Pete - Meanwhile, over at Apple and Amazon.......
Dave Shegonnacrash - Is that the tall poppies that pay your wages or fees? When tall poppies fall, jobs vanish quickly. I will be cutting a few jobs when the crash comes........
Anonymous - It is time that we had a Roya Commission just into those dreadful government departments who appear to do everything to protect the perpetrators and.......
Ross Cardillo - And i ask the question again, who is going to jail from Commonwealth Bank for their actions? They should be sharing a cell with their mates at ASIC
....