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Noise rather than hard fact making investors nervous

Media
09 Oct 2014

“While the markets have shown volatility because of a reaction to commentary about expected changes in global growth, the reality is that the underlying economic trends are still good,” he says.

“The IMF did lower its growth forecast from 4 per cent to 3.8 per cent for next year, but it’s still up on the 2014 forecast of 3.3 per cent.

“China is growing by 7.4 per cent and is expected to grow by 7.1 per cent next year, despite negative commentary.

“Indeed, I believe it could be even higher than forecast because the Chinese government is likely to provide any extra stimulus necessary.”

Mr Bryant said in the US, signs are still very positive which augers well for equity markets. However, this seems to have been overlooked by the Australian market recently.

“Growth in the US is expected to increase by 2.2 per cent this year and is forecast to be 3.1 per cent next year. Target growth in the US is 3 per cent, so this puts it right on track.

“This is supported by data showing US unemployment has fallen to 5.9 per cent and job vacancies are pushing five million – the highest in 13 years.

This poses the questions of why are equity investors nervous and what is all the fuss about?”

“With US reporting season commencing this week, hopefully some of the noise will be put aside and investors will start to refocus on the facts,” Mr Bryant said.

Ends

Contact:

Mr David Bryant

CEO Australian Unity Investments

T: 03 8682 4402 (via EA Ann-Marie Cahill)

E: DBryant@australianunity.com.au

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