Invested with fright
Over the past week the inflow of new funds in the global investment funds amounted, according to the financial company EPFR Global, a record $ 6.6 billion. It is curious that along with the growth of the world economy an important role in this process is played by the geographical factor. It is reflected in the fact that terrified numerous regional conflicts, the investors try to invest their money in safer areas of the planet.
«A rising tide can lift all boats,- commented on the record for the Financial Times (FT) Jim Sarni, senior Manager at Payden & Rygel Investment Management.- The prospect of global growth attracts investors and is now the trend, offering the least resistance.»
As for the United States, there are ongoing local battles, because of the circumstances of importance for the whole world. The plan of tax reform Donald trump met with fierce resistance as opponents in the camp of the Democratic party and party members. The struggle in the Republican party intensifies. Unabated tensions in and around the missile and nuclear programs in North Korea.
Without much risk of mistake, we can say that Europe is at any moment may erupt. Moreover, in several places. The main source of tension after the referendum on the independence of Catalonia moved to the South-West of the continent. Slightly calmer atmosphere and in the Apennines, who are preparing for parliamentary elections next year. Do not forget about negotiating bracito, who for six months held in suspense the whole of Europe and will deprive European politicians dream for a year and a half.
Not surprisingly, in a record year for global investment funds a week of European funds set a month – record- recorded inflows of only 855 million dollars. As you might guess, the Spanish funds are now losing money. During the week investors withdrew from these, 259 million dollars.
Anxiety and growth
The rest of the world, political instability, at least until the economy not interfere. Despite the aggravation of the situation in different regions, there have been increasing signals of recovery of the global economy. The index of the Brookings institution and the FT suggests that the world economy is now experiencing the fastest growth in more than five years. The situation is likely to exacerbate the already long rally and will not allow investors to withdraw completely from the market.
«Looking at what is happening across the planet, explains a senior market analyst at LPL Financial Ryan Detrick,- to clearly see expectations for global growth. In the US, rising company profits, but they grow in Europe with the developing countries. Yes, the estimates are considered overly optimistic; but, there is no escape from the many anxieties, but incomes are pushing up stock markets. We believe that the bear market of securities has not ended and will last at least another week.»
Forecasts for the third quarter in corporate business in General is low, but, on the other hand, many analysts believe that most companies will exceed them. Finally ended the outflow of funds from America-focused funds, which lasted three weeks. American Investfond last week received 357 million dollars. This is a lot, but the amount still pales in comparison to the billions of threads in the beginning of the year.
In the USA it should be borne in mind that investors are cautious and are waiting for changes in the leadership of the Federal Reserve System, which should happen next year. The interest rate on ten-year US bonds is now at a level of 2.32%.
«We continue to believe that the key levels for ten-year securities will be 2.4 to 2.6 percent,- the Director of the U.S. Bank Wealth Management Eric Freedman.- Only if they exceed the three-percent milestone will be possible to speak about the new policy of the authorities in the field of betting. However, to analyze this trend needs along with potential changes in fed policy, which could leave Janet Yelen».