- Title: Global stocks 2017: after the highs, the lows?
- Date: 28th December 2016
- Summary: LONDON, ENGLAND, UK (DECEMBER 14, 2016) (REUTERS) TRADERS ON IG TRADING FLOOR LONDON, ENGLAND, UK (DECEMBER 14, 2016) (REUTERS) (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "What he (Trump) says and what he can do may very well be very separate things indeed. So actually delivering on the promises is going to be his most difficult (challenge). And at that stage the markets get disappointed, and that's where your bubble goes 'bang'." TRADERS WORKING AT DATA SCREENS LONDON, ENGLAND, UK (DECEMBER 13, 2016) (REUTERS) (SOUNDBITE) (English) FIDELITY INTERNATIONAL, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "The question now is about delivery. The markets have risen in anticipation of this growth story, particularly in the US, and now I think companies have to deliver to justify valuations which are quite high by historical standards." TRADERS TALKING ACROSS OFFICE CHRISTMAS CARD ON TRADER'S DESK LONDON, ENGLAND, UK (DECEMBER 20, 2016) (REUTERS) (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "In a nutshell, I think it's going to be quite hard for the equity markets to sustain the performance of 2016, particularly if earnings remain under pressure, as it seems to me they will." TRADERS AT SCREENS WITH HEADSETS LONDON, ENGLAND, UK (DECEMBER 19, 2016) (REUTERS) (SOUNDBITE) (English) DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING: "They (Federal Reserve) have talked about multiple rate rises in 2017. Of course, they said that about 2016, and we only had one." TRADERS STUDYING DATA SCREENS LONDON, ENGLAND, UK (DECEMBER 20, 2016) (REUTERS) (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "We know there are profound vulnerabilities (in China) and in particular the vulnerabilities that have not gone away associated with still mountainous levels of indebtedness." TRADER TALKING ON TELEPHONE TRADER STUDYING DATA SCREENS LONDON, ENGLAND, UK (DECEMBER 14, 2016) (REUTERS) (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "You've had the festering losses within the banking system in Europe lurking under the surface. Only now are some of these coming out and you can see the horrific banking pus which is there in terms of the Italian banking system. But also not just there. Look at Deutsche Bank - with its derivatives, it looks more like a hedge fund." TRADER TYPING ON KEYBOARD
- Embargoed: 12th January 2017 15:50
- Keywords: global stocks equities markets shares 2017 trump china dollar inflation risks
- Location: LONDON, ENGLAND, UK / NEW YORK, U.S.A.
- City: LONDON, ENGLAND, UK / NEW YORK, U.S.A.
- Country: Various
- Topics: Economic Events,Equities Markets
- Reuters ID: LVA0015ESRB0T
- Aspect Ratio: 16:9
- Story Text: The U.S. stock market's bull run since 2009 could extend into 2017 if President-elect Donald Trump's plans to stimulate the economy with infrastructure spending and financial deregulation come to pass, according to strategists in recent Reuters polls.
But limiting the enthusiasm are threats by Trump to consider imposing new import tariffs and the prospect of a potentially stronger dollar.
"What he says and what he can do may very well be very separate things indeed. So actually delivering on the promises is going to be his most difficult. And at that stage the markets get disappointed, and that's where your bubble goes 'bang'," said 7IM Head Of Corporate Development, Justin Urquhart Stewart.
Accelerating inflation and a soaring U.S. dollar as the Federal Reserve raises interest rates are also risks to the economic balance, although some analysts played down the prospect of more than one hike from the Fed in 2017.
"They've talked about multiple rate rises in 2017. Of course, they said that about 2016, and we only had one," said Independent Market Analyst, Darren Sinden.
Economists also told Reuters there is plenty more uncertainty about trade with China now than a year ago.
"We know there are profound vulnerabilities and in particular the vulnerabilities that have not gone away associated with still mountainous levels of indebtedness," said Independent Market Analyst, Jeremy Batstone-Carr.
Other analysts in Europe say the threat may be closer to home, where, they say, a banking crisis could still be a real prospect for 2017.
"You've had the festering losses within the banking system in Europe lurking under the surface. Only now are some of these coming out and you can see the horrific banking pus which is there in terms of the Italian banking system. But also not just there. Look at Deutsche Bank - with its derivatives, it looks more like a hedge fund," said Urquhart Stewart.
Many of those polled say the global trade slowdown during the world economy's lukewarm recovery from financial crisis that started nearly a decade ago could worsen.
The most optimistic U.S. growth forecast for any point in 2017 in a Reuters poll taken a month after Trump's shock election victory was 3.8 percent. The consensus, in line with the Fed's view, is a little above 2 percent.
Such lukewarm growth does not compute with the more bullish stock market views, although it is clear many strategists who initially said Trump would be a threat to markets have abruptly changed their minds since the election. - Copyright Holder: REUTERS
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