Markets are tumbling in a global sell-off as investors get wake-up call.
“We are witnessing … classic signs of an impending correction,” said Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch who was once seen as the biggest cheerleader of the current rally. “We expect volatility will rise in coming months.”
Mr. Hartnett said sharper pullbacks such as Thursday’s may become more common this year as stock markets remain expensive and investors begin preparing for higher interest rates.
Recent data showed the U.S. grew 4% in the second quarter, easily beating forecasts of 3%, leading many economists to speculate whether the U.S. economy could surpass expectations for the rest of the year and force the Fed to become more hawkish.
If positive data continues to pile up, there is a risk investors may start to fear a rate shock.
Source: http://business.financialpost.com/2014/07/31/brace-for-more-selloffs-as-traders-look-for-reasons-to-head-for-the-door/
“We are witnessing … classic signs of an impending correction,” said Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch who was once seen as the biggest cheerleader of the current rally. “We expect volatility will rise in coming months.”
Mr. Hartnett said sharper pullbacks such as Thursday’s may become more common this year as stock markets remain expensive and investors begin preparing for higher interest rates.
Recent data showed the U.S. grew 4% in the second quarter, easily beating forecasts of 3%, leading many economists to speculate whether the U.S. economy could surpass expectations for the rest of the year and force the Fed to become more hawkish.
If positive data continues to pile up, there is a risk investors may start to fear a rate shock.
Source: http://business.financialpost.com/2014/07/31/brace-for-more-selloffs-as-traders-look-for-reasons-to-head-for-the-door/
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