Stock Market Update
While the much feared sell-off in share prices has not yet materialised, is it time to enter the market again? Caution should be the watch word……
Historically stock markets very often shown a short term bounce after large falls, and the current situation is no different. A small bounce in the US market and a recovery from earlier lows in the UK market are encouraging, but time is of the essence. While it may be that worldwide markets over reacted earlier in the week, there are some grounds for concern in the short term.
Governments around the world are currently looking at ways of cooling down over-heated economies, and while the impact of interest rate rises is yet to really hit home, it is encouraging to see the financial authorities being proactive rather than reactive. Opinion in the financial markets is currently split, with some observers confident of a “soft†landing for the major economies of the world, while others fear recessionary type scenarios.Â
While it may be tempting to “take advantage†of the recent falls in the market, it may be more prudent to let the situation calm down and review markets on an ongoing basis. The next round of economical statistics and interest rate reviews will be crucial, and should show investors whether financial authorities around the world are concerned about the recent events in China, and the reaction of world stock markets.
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