“The last summer month pleased with serenity of financial markets. S&P500 was not the only index to refresh its historical maximum, two other major indices – Nasdaq and Dow Jones Industrial demonstrated new historical highs in August. Main reasons for that were released financial reports, investor’s optimistic expectations and FED’s money monetary policy. While stock indices stood at the record levels, stock price volatility was extremely low. Historically strong correlation between stock volatility and high yield bonds suggest that in case volatility will remain low the bonds could appreciate further”, note the experts.
“China showed improvements in business activity, especially in non-manufacturing sector. Nevertheless, growth of fixed investments declined, but continued increase in rent in the major cities of China stimulates construction and demand for industrial commodities. At the same time, slow growth of the economy, sluggish inflation, extraordinary unconventional monetary policy and persistent resistance to reforms derail attractiveness of Europe”, consider experts.
It is also noted in the review that this month oil prices were influenced by the data on the reduction of oil product reserves and the announcement about an informal meeting of leading oil manufacturers in Algiers in late September. Still, high uncertainty is retained on the markets, which bears both risks and good opportunities.
The RAM review and latest expert comments can be read here.
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