A wall of worry...

Bloomberg has posted an article this morning emanating from global equity stratigists from Credit Suisse. The conclusion is that "everyone is baffled by the market". They state that "Never have we seen so many clients who just do not know what is happening have cashed up"

Some of the chief concerns according to the article:

  1. China's hard landing. They point out that "real" data are consistent with 3-4% growth. On the list of worries is the degree of "zombie capital sloshing around the economy".
  2. Declining global growth. Credit Suisse's recent survey says pessimism for growth was nearing all-time record highs
  3. The effectiveness of quantitative easing. Many surveyed felt that QE was losing it's impact and effectiveness on the economy.
  4. A smaller piggybank FX reserves. A new concern is the decline in FX reserves (-0.5 trillion). Credit Suisse points out this may be overstated as most has been in China and the decline there has been "sterilized" via "more domestic liquidity"
  5. Hostile politicians. A number of clients are worried about how politics are becoming "less capitalist friendly".

Overall - the article points out - "clients a very focus on. Risks in global markets, which are admittedly abnormally high."

The full article can be found HERE