知識社群ePortfolio登入
Fidelity Investments' Timmer: Investors Watching Volatility Should Keep a Close Eye on China
by 趙永祥 2018-02-23 22:05:48, 回應(0), 人氣(495)


Fidelity Investments' Timmer: Investors Watching Volatility Should Keep a Close Eye on China








February 20, 2018 — 3:37 PM EST

Volatility has finally reappeared in the U.S. markets, but investors looking globally for the next potential shoe to drop may want to set their sights on China.


With economies growing globally around the world, corporations in the U.S. posting strong earnings and the Eurozone emerging from its debt crisis of a few years ago, a potential trouble spot from a global perspective could be China, said Jurrien Timmer, director of global macro for Fidelity Management and Research, in an interview with Investopedia. "The next big thing to watch is the Chinese economy," said Timmer. "Volatility has to come somewhere. China has this two-year cycle where they go from boom to bust to boom to bust. The latest upcycle started in early 2016."

[Check out Investopedia's Ally Invest review to learn about this low-cost broker with powerful charting tools.]


According to Timmer, the good news is that the rolling crisis affecting economies all over the world during the past decade is finally behind us. The U.S. was the first to feel the pain back in 2008 amid the real estate bust, while Europe was next with the Eurozone debt crisis in Greece, Spain and Italy. China's economy has also moved away from a slow-growth environment, while Japan has stabilized.


China's movement from barely growing at all back in 2015 to seeing strong improvements is the most recent piece of the puzzle in generating the bullish backdrop for global investors, said Timmer. "In 2016, the Chinese government created more credit and more loan growth to get the economy back going again, and that is what started this current global synchronized expansion," said the Fidelity Investments strategist. "China is very much at the center of that bullish inflection point; therefore, we need to look and see if there is any change in that."


Timmer isn't predicting that China's economy is going to slow back down any time soon, but if investors want to prepare for the potential for more global volatility, they should keep China front and center. After all, the country is the leader in consuming just about everything, and how it performs has a big impact on emerging market economies as well as industrial companies both in the U.S. and Germany, among other regions. And with the country known for these boom and bust cycles, Timmer said it is something to be on the lookout for. Working in China's favor is the fact that it has been moving away from its old economy and focusing more on technology, which could reduce the number of boom and bust cycles it undergoes.


As for what it all means to the U.S. stock market, Timmer said that the sell-off in early February was a correcting of imbalances in the market, with investors ignoring bond prices over the past six months and a sharp increase in earnings estimates. "Both things have now been addressed. My sense going forward is that market valuation will be the main issue. Not the earnings picture, not even the interest rate picture anymore," said Timmer. "My sense is valuations need to come down."




Read more: