After decent gains in shares and other growth assets since February we could have a short term rough patch given risks around the Fed, Brexit, elections, etc. However, with most share markets offering reasonable value, global monetary conditions remaining easy and no sign of the much feared recession (in the US, globally or Australia) the trend is likely to remain up.
Since the global growth panic in January/February share markets and commodity prices have seen a decent rebound and the stress in credit markets has receded. This has been helped by a combination of Fed assurances that it will not be reckless and ignore global risks in determining US interest rates, somewhat better economic data in the US and China, more monetary easing in Europe and a rebalancing in the global oil market that has allowed oil prices to stabilise which has helped reduce the risk of default by energy producers. However, the big question is whether it is sustainable or just a bounce. This note looks at the main issues.
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