This edition of Oliver’s Insights looks at the recent volatility and correction in share markets.
The key points are as follows:
- After strong gains shares were due for a correction. Worries about the Fed, Japan, China and the growth outlook in Australia have provided the trigger.
- However, with Fed tightening fears overdone, the US economy on a sounder footing, Japan looking stronger, China likely to grow around 7.5% and the Australian economy to benefit from low interest rates and a lower $A, a re-run of the 15 to 20% falls seen around mid 2010 and mid 2011 are unlikely.
- Our cyclical view for shares remains positive, with further gains likely this year. We remain of the view that by year end the ASX 200 will end around 5250.
To read more, click here.