Læs hele analysen fra Danske Bank her
It’s year-end and investors are cashing in on their investments for the year. At the same time, some stock markets touched overbought levels from a technical point of view and in those situations it doesn’t take much event risk to cause a correction. (…)
However, while the baseline scenario is strengthening, the more oil prices decline, the higher the tail risk also becomes. Oil exporters are experiencing significant pressure and the quality of debt to, for example, US oil producers is deteriorating rapidly. Among oil exporters, concern is especially focused on Russia where a very deep recession and lower oil revenues is putting a lot of strain on the financial system. Another source of uncertainty lately is the looming votes in the Greek parliament on a new presidential candidate. If parliament fails to approve a new president over the next month, new elections will be called. As the euro-sceptic Syriza is in the lead in the polls, a new election in Greece could lead to a heightened risk of a Greek exit. Focus on rising tail risk triggered the correction in risk appetite over the past week with especially energy companies suffering on the stock market and peripheral bonds getting hit from the uncertainty in Greece.
In the short term there is a rising risk of more correction in the stock market. However, we don’t expect a big sell-off as a) the underlying growth picture is improving and indicators support a synchronous recovery in H1 15, b) new stimulus from the ECB will work to secure another year of significant liquidity boost to the global economy (see more below). Hence, our medium-term outlook is still for risk assets to outperform but we should expect another year with bumps on the road as the Fed begins hiking, which may add to the challenges of the emerging markets
