MFS Global Markets OutlookKarin Liu
In this month’s outlook, the MFS portfolio managers provide a summary to digest regarding the decisions in Washington and factors impacting the global growth potential.
Events in Washington lead to uncertainty in the global markets. Fears and expectations of the U.S. government shutdown and tapering have yielded a highly volatile market due to the lack of answers and the anticipation of decisions in the U.S. However, signs of a broadened global economic growth seem to be emerging with the lack of U.S. dependency.
Long-term is the way to go during this time of chaos in the financial markets. Short-term investors continuously wait for decisions to be made as the issues in the U.S. markets will affect much of the short-term sector of investing. As for the long-term investors, they can wait cautiously and use this time as an informative seminar to gain knowledge.
Normalization of interest rates means higher interest rates compared to the almost zero percent it holds currently. Higher interest rates are indefinite due to the U.S. quantitative tapering but, they are not at the high levels that were once estimated. However, the uncertainty and lack of decisions in the U.S. government, lead financial analysts to make assumptions and calculate expectations for when decisions are made and put into play.
With all the confusion and expectations for future adjustments, there are positive factors in the market to focus on while we wait for decisions to be made. The reports prove positive opportunities in the middle of the credit spectrum. Also, long-term investments remain conserved and, should they see adjustments, it will be further down the road, whereas short-term investors might be on edge; they too must not act out of fear but wait for decisions to be made and then, act accordingly.
While the financial markets worldwide wait for an answer from the U.S. government, there are other aspects that can re-instill confidence and offer positive opportunities for future investments.