More signs of divergence are seen in the markets as two major investment banks, Goldman Sachs (GS) and Morgan Stanley (MS) hold different view towards the economy. Essentially, their views include different perspectives towards oil prices and US treasuries.
During an interview at the World Economic Forum in Davos, billionaire investor George Soros warned investors of a hard landing in China. When the slump in China occurs, he expected it to worsen global deflationary pressures, drag down stocks and boost US Treasuries.
The first week of January 2016 proved to be a turbulent one for the global and Chinese equities market. Investors have been so worried about China that the fear spread itself globally. However, Mark Mobius assured investors that there is nothing much to worry about as China is expected to have a growth of 6 percent in GDP in 2016.
As manufacturing slows down in China, the world’s second largest economy is struggling to find its new balance. GDP growth will no longer be in double digit, but a mere projection of six percent for 2016. What are the opportunities for investors as the Chinese economy goes through a transition from manufacturing to service, and what are the sectors to avoid?
With the sharp drop in the global equities market in the past week, many are asking this question: Are we facing a correction or recession? An analyst from JP Morgan (JPM) recently commented that investors should do what is contrary to what was recommended in the past years. He recommends investors to sell on any rallies rather than the previous “buy on dips” call.
In the second part of the Morgan Stanley Research’s (MS) playbook for 2016, we will be featuring its view on global bonds. With the increasing uncertainty in the global equity market, investors may wish to seek haven at other investment vehicles such as bonds.
In the third and last part of Morgan Stanley Research’s (MS) 2016 playbook, we will be covering on foreign exchange (FX). As the Federal Reserve (Fed) raises their interest rates, the USD strengthens against most major currencies.
There are two factors that are causing the rising volatility in the stock market today; China and the rise in interest rates from the US Federal Reserve (Fed). As the saying goes, if you can’t beat them, join them. Opportunities will arise from the rising interest rates as long as your portfolio is prepared for it.
Years of low interest rate environment allowed inflation to erode our savings. How should we reach the goal of a comfortable retirement? As red lights start to go off for the US Social Security, it is a sign for us not to be over reliant on our CPF.
In the first part of the Morgan Stanley Research’s (MS) playbook for 2016, we will be featuring its view on global equities. As seen on September 2015 and the first trading week of 2016, volatility is persistent in the market. With this taken into account, MS allocated a stronger buy sentiment to US, weaker buy for European, neutral for Japanese and slight negative for Asia Pacific excluding Japan.