Outlook: Market meltdown fails to emerge
Outlook on the proposed solution to the problem of sets, the risk of a global stock market crash, and the contrasting fortunes of BT and C&W
Friday 29 May 1998
The problem is that without understanding the past it is hard to predict what the future holds for both Asian and other emerging markets. The signs are that the Governor's uncertainty is widely shared in the financial markets, marked as they are by intermittent flurries of contagious panic that stop as mysteriously as they started. One day a generalised panic; the next investors are picking out the soundest markets and snapping up bargains.
Wall Street holds one crucial key to the outlook. The lesson from 1987 is that serious global stockmarket contagion is propagated from US to the rest of the world, and not the other way round.
This is scant comfort to the bears who think Wall Street is now massively overvalued, but - so far - they have been in the minority. Yesterday once again saw investors buying up hi-tech stocks, albeit rather hesitantly, at the first sign of a setback.
Another important point is that emerging markets are not all the same. While South Korea is making rapid strides in its banking and corporate reform, so that the IMF forsees a recovery starting as early as next year, Indonesia remains in an utter mess, and it is likely that Hong Kong still has the worst of its crisis to face, having so far postponed it.
There are still Asia-wide worries. For example, a Chinese devaluation would have serious knock-on effects for all its neighbours. This will keep all of the region's markets under a cloud for some time.
But even so, international investors do distinguish between emerging stockmarkets far more finely than was the case a few years ago. So far, fingers crossed, Asia has not infected Russia and has not crossed over to Latin America.
It would take a brave soul - braver than Mr George, for one - to rule out any risk of a round-the-world stockmarket collapse of the 1987 variety. Yet on this week's evidence, it is still a possibility rather than a probability.
- 1 Liam Gallagher brands Kanye West 'utter s**t' during BRIT Awards performance
- 2 Isis burns thousands of books and rare manuscripts from Mosul's libraries
- 3 People who sleep more than eight hours are more likely to have a stroke, research shows
- 4 Kanye West climbs on table at Nando's to crowd chants of 'Yeezus' before Brit Awards 2015 performance of 'All Day'
- 5 New theory could prove how life began and disprove God
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
iJobs Money & Business
£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...
£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...