Former Goldman Sachs Asset Management Chairman Jim O'Neill told that there are signs that a 10-year bull market in stocks is set to end.
Speaking at the Ambrosetti Workshop on the shores of Lake Como, near Milan, O'Neill told that the U.S. market was "definitely not cheap" and "very sensitive" to any bad news.
Weekly jobless claims in the United States have fallen to their lowest level since 1969 and the former Goldman executive noted that it is entirely possible that the U.S. Federal Reserve could find itself quickly reversing a dovish outlook that has been in place since early 2019.
O'Neill said any suggestion that the Fed was tightening would upset both the U.S. stock and bond markets.
"The idea that maybe the markets were right all along and the Fed will be tightening by the end of the year is not a crazy idea in my view," he said, before adding, "We might be entering the end of the 10-year almost clear bull market in equities. The kind of volatility we have seen in the last six months is very different from the past 10 years."
Investors and corporations alike are watching to see if trade talks between China and the United States will result in a summit between U.S. President Donald Trump and Chinese President Xi Jinping.
Earlier this week, the International Monetary Fund's managing director, Christine Lagarde, said the global economy is in "a delicate moment" and noted the clear downside risk of China's trade tensions with the U.S.
O'Neill said 85 percent of everything that has positively affected the world's economy since 2010 had come from the two countries and therefore any summit agreement between them needed to be considered as a "big deal."
The former trader issued a note of optimism for economies, highlighting that the latest set of Goldman Sachs data suggested that global economic conditions could soon arrest their decline
"Since last November they have all been going down, In the past fortnight, signs of them stabilizing. That in itself is a relief," O'Neill added.
Source: CNBC
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.