Friday, 19 January 2018

Markets mixed, “very, very dangerous to be out of the market”

Markets were mixed on Thursday.

The S&P 500 fell 0.2 percent but the STOXX Europe 600 rose 0.2 percent.

Earlier in Asia, the Nikkei 225 fell 0.4 percent but the Shanghai Composite rose 0.9 percent.

Investor sentiment got a boost from China's economic growth report, which showed an acceleration in 2017 for the first time in seven years.

However, worries in the US over a possible partial government shutdown weighed on markets.

“I wouldn’t be surprised if markets made a small retreat, or at least took a breather given the threat of a shutdown this weekend,” said Lee Wild, head of equity strategy at Interactive Investor.

However, over the longer term, analysts appear to remain optimistic on stocks.

“Historically, in an environment of slowly rising yields the market has done very well,” said Randy Frederick, vice president for trading and derivatives at the Schwab Center for Financial Research.

Indeed, Alan Higgins, chief investment officer at Coutts & Co, pointed out that the “last two years of the bull markets are the best”, with a return of at least 30 percent.

“So it’s very, very dangerous to be out of the market,” he added.

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