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With the weakening of last week, equities have now fallen to their levels in early October and, in addition, the Oslo Stock Exchange has fallen more than 10% from the peak.
"I continue to say that the fall of the stock markets this fall is a typical correction," said chief economist and partner, Bjørn Roger Wilhelmsen, at Nordkinn Asset Management, at Hegnar.no's address.
The correction that took place in early October has been corrected by higher interest rates on US government bonds, but forecasts of a slowdown in economic growth and the fall in the price of US government bonds. oil, according to Wilhelmsen, have helped to reinforce the downturn in the stock markets in recent weeks.
An opportunity to buy
On October 11, the chief economist explained to Hegnar.no that a typical correction is 10-15%, sometimes 20%.
"It's been a long time since the previous correction and we should not be surprised if we see Oslo Børs fall by an additional 10%," Wilhelmsen said.
According to the Chief Economist, at that time, the stock market crash had been too short and too short to offer a clear buying opportunity.
Read also: Oslo Børs could still fall by 10%
"Looking at the outlook in the future, I'm also thinking of slightly weaker global economic growth in 2019 compared to 2018, mainly due to a lower contribution from the United States. think that growth in 2019 will be good enough to continue to support the stock market somewhat, "he said.
According to the chief economist, there is no doubt that we are in a late phase of this global recovery, but he still thinks that we still have a few years left.
"So I think of a decline in the stock market in the coming months," says Wilhelmsen, who does not seem so enthusiastic in a two or three year perspective, because of several factors:
- There is a real risk that the US economy will go into recession within two to three years
- The Italian public debt crisis could become an increasingly serious problem over the next two years.
The factors of uncertainty
According to the chief economist, the main uncertainties are the downward trend in global growth, especially in the eurozone, and the Italian sovereign debt crisis, followed by Trump's strategy for the US trade war. Next year.
– What can be positive for?
– Firstly, the Italian government agrees to reduce the government's budget deficit for 2019, which could provide short-term optimism and prevent Britain from "abrupt difficulties".
– In addition, growth in the euro area, which has slowed in 2018, will return next year and, in addition to the desire to strengthen communication between the United States and China, which culminates in the end of the trade war , relies on Wilhelmsen.
Read also: Watch the decline on Oslo Børs
The main engines
Senior economist Halfdan Grangård of Handelsbanken Capital Markets also believes that, as usual, we should look beyond the borders of Norway to look for the main drivers of development in Oslo Børs.
"This week will be the meeting between the US President and the Chinese President in the framework of the G-20 meeting by the end of the week." The signals of these meetings on a possible improvement of the climate of cooperation between the China and the United States could help increase risk sentiment, "Grangård told Hegnar.no.
The evolution of oil prices is also particularly important for Oslo Børs.
– Prior to the December 6 OPEC meeting, initial discussions will take place between the parties. The signals here suggesting agreement on large production cuts will be able to drive up oil prices and be a positive factor for Oslo Børs, says a chief economist.
In the longer term, according to Grangård, global growth is an important factor.
– Here, the narration on the market has become increasingly negative in recent weeks, the key figures remaining disappointing. In parallel with the prospects for improving the business climate, stabilizing or reversing the negative trend in global macroeconomic data could help increase risk appetite and support stock markets.
According to the Economist Handelsbanken, it is clear here that the data on activity, which contains new stimulus measures, can be an important signal for the global economy.
"Among the downside risk factors, we can cite the opposite trend of macroeconomic data to that suggested above, the deterioration of the business climate between China and the United States, the acceleration inflation in the United States, which contributes to the rise in interest rates, "Grangård concludes.
Read also: "These are all risk factors – also for Oslo Børs
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