Orininally posted on 16 August 2011
It has been just over a week since the financial markets started dominating the news for all the wrong reasons. One week on, the US has had its credit rating downgraded and we are continuing to experience global market volatility and uncertainty. We believe the following key points remain true and are as follows:
- The economic outlook in Australia remains positive, with the mining boom continuing and low unemployment keeping household incomes stable.
- Authorities around the globe are taking tangible action to help stabilise markets and assist heavily indebted nations.
- Recent falls in longer term interest rates and a lowering $A will benefit the earnings profile of several key Australian companies.
In addition, whilst in the short term the US credit rating downgrade creates further uncertainty, economists have predicted that this will have less impact on borrowing costs that feared and may actually have a positive impact on countries whose currency continues to hold the AAA rating, including Australia.
Australian Market Volatility Update – Paul Taylor, PortfolioManager – Fidelity Australian Equities Funds
In this video message, Paul Taylor explains what he believes to be the key contributors to the current volatility as well as his outlook on where Australia is headed.
This article looks at the real impact of this news and how it should affect US and other markets.
AMP have put together a dedicated page on their website with a range of information to help you navigate through the current volatility. AMP has consolidated the latest information including economic commentary, Q&As and some video footage. This page will continue to be updated to provide you with a balanced view of the economic situation as it unfolds.