View more on these topics

Market turbulance enters its third phase, says BlackRock

Turbulence in the financial markets has entered its third phase, with investors trying to understand the economic and profit consequences of the higher cost of capital and tighter credit conditions, says BlackRock.

BlackRock vice-chairman and chief investment officer for global equities Bob Doll says the first phase occurred when investors became aware of the losses in the U.S. mortgage markets and the second was marked by a significant reduction in risk and a withdrawal of liquidity as investors began trying to reduce their exposures to these markets.

He says: “As we noted last week, attention is now heavily focused on the Federal Reserve and, specifically, on what actions the central bankers may take to help stimulate growth and facilitate more normal trading in financial markets.

Doll says he expects the US Fed to cut the target rate by at least 25 basis points at its next meeting on September 18.

He says: “The debate has shifted in most quarters from wondering whether the Fed will cut rates to trying to determine how far it will cut them. Global credit markets still are not functioning properly, which has been prompting action by central banks around the globe. Most (including the Fed) have continued to inject liquidity into the markets in an effort to normalise private sector lending, but so far have had limited success.

“In our minds, the implication is that a more forceful change in policy could be warranted to prevent the U.S. economy from potentially sliding into recession.”

Recommended

1

Goodbye Aifa says Towry, hello Reeve says Pos Sol

The biggest splash in the distribution world this week was the scathing attack on Aifa made by Towry Law’s Andrew Fisher as he announced his firm would be quitting the trade body over its position on the RDR.

Thinc buys Kent adviser to extend regional reach

Thinc Group has bought Maidstone IFA Cameron Scott in a move aimed at bolstering its presence in the South-east.Cameron Scott’s 18 advisers will continue to work out of their current offices as part of Thinc’s drive to open more regional offices.Chief executive John Simmonds says the acquisition also reflects its developing group strategy of attracting […]

SJP grows fund offering

St. James’s Place has added two new fund managers and three new investment funds in its growing fund proposition. The new funds and managers have been chosen to broaden the range of investment styles available for St. James’s Place clients and will be available from October 1. The new funds will be the diversified income […]

VIEW POINTS

FundsNetwork head of sales and marketing Rob Fisher “In principle, FundsNetwork is supportive of what Cofunds is saying. The ability to be able to advise clients to move their assets to where they want to have them is clearly an important thing. We are making progress on these areas. Slowly but surely, I think that […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment