In the latest Oliver’s Insights, Dr Shane Oliver looks at the political risks around President Trump and the risk of a correction in share markets generally.
The key points are as follows:
- The political scandal around President Trump is likely to speed up rather than stop his pro-business reforms.
- However, after a strong run, shares remain vulnerable to a short-term correction with worries around Trump, North Korea, the Fed, etc, all providing potential triggers.
- But with most share markets offering reasonable value, global monetary conditions remaining easy and global growth and profits looking good the trend in shares is likely to remain up.
Meanwhile, terrorism looks to have reared its ugly head again this time in Manchester in the UK and our thoughts are with those affected. Financial markets may see a minor short-term negative impact but the experience since early last decade has highlighted that terrorist attacks on targets like buildings and sports venues don’t really have much economic impact.