Capital Market Outlook 2012
Out of the frying pan into the fire?
A high level of uncertainty will probably continue to accompany the markets in 2012 as well, but there are some attractive opportunities among risky assets.
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Documente în limba maternă
Equity markets weekly
USA
The latest setback of US equity market indices can almost exclusively be attributed to rising energy prices that go hand in hand with the political unrest in parts of Northern Africa. However, as long as this crisis does neither last too long nor spread to the Middle East the main drivers of the stock markets – the impressive macroeconomic environment combined with ongoing ample liquidity – should survive. Corporate America still earns plenty of money as the expiring earnings season is currently telling us. Even though elevated index levels are vulnerable to renewed setbacks triggered by i.e. ongoing oil price increases we keep on being confident regarding the development until mid-year.
Europe
The crisis in Libya and the latest strong jump in the Brent oil price put a damper on European stock markets. Especially worries that the rise of the “black gold” will hurt the economic expansion clearly weigh on the sentiment. Nevertheless unrest in Libya has also been taken as an opportunity for profit taking after the strong index gains seen during the past months. Nevertheless losses have so far been limited. In our opinion, however, major impacts would only be likely in the event that the situation in the Arabic region escalates even further (spreading to affect the GCC countries). Developments of that nature would prompt us to reassess our forecasts again. Nevertheless, this is not the baseline scenario for us, and thus we remain confident about the performance of the equity markets heading towards mid-year.
Source: Raiffeisen Research, 25 February 2011