Question

What is the current state of affairs of global financial markets? Please discuss refere sources in current financial media (i.e., Bloomberg, Financial Times, or The Wall Street Journal).

Answer 1

The current state of the global financial market is that there is overall global growth which is fuelling the increase in allocation to risky assets. So, more and more investors are investing in equity markets globally.

The global growth hit a rock bottom during the financial crises of 2008 and has been at the highest level since then. The developed markets like the Europe and the US have already been doing very well since the last few years. The emerging markets like Russia, India, Chin and Brazil are all catching up with good growth rates. So the advice as of now to equity investors would be to shift slightly from developed to emerging markets as they have a higher potential for growth. The US stock markets are at life time highs and have given the best return in several decades. So at this point its better was investors to reallocate some of their capital to emerging nations to improve their overall return.

Some of the risks that can arise at present is the geo-political tensions between US and North Korea which can create turmoil in global market. Secondly the unprecedented rally in Cryptocurrencies like Bitcoin around the world has created a bubble like situation and any problem with these virtual currencies may affect the capital markets in the short term.

Resource: https://www.bloomberg.com/news/articles/2017-11-29/goldman-warns-highest-valuations-since-1900-mean-pain-is-coming