The Danish raise rates, China stops margin loans, what's next? I cannot remember a time when so many events were hitting the markets with such consistent...

Nicholas Forsyth

Market Matters

The Danish raise rates, China stops margin loans, what's next? I cannot remember a time when so many events were hitting the markets with such consistent regularity i.e.volatility is increasing. Markets are expecting Mario Draghi to announce yet more stimulus by the ECB this week and then next week, we have Greek elections, hence volatility is likely to remain. The story remains the same, More artificial liquidity being pumped into the system by Central Banks, massively supporting equity markets, but we saw last week what happens when this is removed, the Swiss Stockmarket fell >15% in two days. Understand I am not panicking about pending crashes/bear markets, but a decent correction in equities is simply easy to visualise at present and we should be ready to take advantage if it occurs. Recently the high yielding banks and insurance stocks have been underperforming and I am wondering if some of the massive carry trade is slowly being unwound as large hedgefunds/traders start to lock in profits before conditions change, this would likely send stocks to my target areas in the sector. (VIEW LINK)


Nicholas Forsyth
Director
Market Matters

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