STANLIB's Financial Market Update
Summary of Financial Market crisis:
Share markets around the world have been rocked by the latest casualty in the US (see below), although the falls in overall indices have not been dramatic.
The US S&P 500 Index is trading approximately at its low seen in January this year (down about 18% from its record), although the European indices have dropped below January‟s low.
Emerging markets have so far held up better, with even the JSE‟s weaker financial & industrial index still higher than its worst level in January. The big commodity boom and weaker rand have helped the resources shares, which are still close to record highs.
Our view is that there is plenty of risk out there, plenty of danger because of high uncertainty (it remains very „cloudy‟ out there, very difficult to „see the wood for the trees‟ especially regarding the US, the seat of the credit crisis). Will the US have a deep, long-lasting recession or will it be shallow? It is tough to say.
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