Markets to remain strong but expect a brief consolidation

PETALING JAYA: The global economy is still growing steadily and remain in a low inflationary condition but foreseeing some profit taking in the equity markets as they have had excellent gains this year.

In a statement yesterday, Pacific Mutual Fund Bhd, an investment management company under the OCBC Group saw that the US stock market is at all-time highs and equity markets globally has been very buoyant, even with on-going geopolitical risks.

“This bull market does need to have a short breather and the trigger could be earnings of US corporations which could miss expectations in the third quarter of 2017 due to the recent hurricanes and higher base effect compared to 3Q2016,” highlighted chief executive officer and executive director of Pacific Mutual, Teh Chi-cheun.

Naturally, with the rise in equity prices, valuations for major market are also relatively expensive as compared to their 5-year average. Hence, more volatility is expected in the near term, especially so if corporate earnings growth is slower than expected.”

Teh added, “That said, the global economy is doing fine with stable growth and inflation has peaked after energy costs stabilised. The Eurozone will lead global growth as their retail spending and consumer confidence recovers with pick-up of world trade. — Bernama