Store the cache and prepare for the worst economist on the effects of the fall in world stock market
Monday, February 5, the global financial market was shaken by a strong wave of sales. Shares have fallen from their recent highs by 10 percent or more.
“This is the first alarming signal for the global economy. Yes, it’s still good – wages and inflation are rising, incomes of businesses, and GDP of most countries well clocked up. However, the rapid growth of profitability of us government bonds (because of rising threats of inflation and expansion of the US budget deficit as a result of tax reforms) triggered the first wave of sales of shares,” explains economist, managing partner of “Capital times” Eric Nyman.
He predicts that today and tomorrow sale of financial assets over.
“And the people will rush to buy it (us government bonds have already risen significantly on the risk aversion). A typical correction for the late phase of macroeconomic growth is 10-12% that had actually happened. However, the closure of marginal positions could trigger another wave of panic sales, which will buy the professionals (“get’ em cheaper”). Then the stock market will probably resume growth and can even refresh the historical highs or so (over the past century this has happened, 10 of the 12 exchange cycles),” – said the expert.
Until may the situation in the world economy is likely to trigger the deterioration of forecasts of profit of joint-stock companies and in may can begin a bear market. Usually, it lasts about a year and during that time stocks fall to 35-50%, says Naiman.
“And because the dynamics of stock markets to predict the situation in the economy, then until November it is expected the beginning of the economic crisis in the United States. If this really happens (reality can be different, better or worse than my predictions), pretty soon will cover crisis and the global economy. Ukraine, with its huge payments of foreign debts in 2019-2020. So keep your cache and prepare for the worst,” – said the economist.
Videostories drop: the American Dow Jones sank fifteen hundred points
This is one of the most important indicators for the US economy. Such for all history of existence of stock exchanges do not remember. Will they stop at this market fever, which began last Friday – will be known in the coming hours, when the exchanges will begin a new auction.
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