Oliver's Insights - Cyclical recovery in shares remains on track, albeit bumpy
22 Nov 2010 - This note looks at the outlook for share markets.
The key points are as follows:
- Share markets and related trades such as commodity prices and commodity currencies like the Australian dollar have fallen over the last two weeks, partly triggered by worries about the impact of Chinese tightening to control inflation and the re-emergence of sovereign debt problems in Europe.
- However, this is likely to be a correction in an ongoing cyclical recovery in shares, as the global recovery looks like it is continuing, shares are still cheap, the liquidity backdrop for shares is positive, and a cashed up corporate sector is likely to lead to increased capital being returned to shareholders.
