Markets

Have investors shifted market sentiment too quickly?

Dina Belenko Photography / Getty Images
Dina Belenko Photography / Getty Images

As every fan of horror movies knows, the best way to elicit screams is to lull the audience into a false sense of security. It's when everyone has relaxed, thinking the worst has past that the real fright occurs. Since bottoming in late December, global equity markets have rallied more than 10% in dollar terms and market volatility has been cut in half. This raises the question: Have investors gone from panic to complacency too quickly? A few observations:

1. The economic data has not stabilized.

Future GDP growth implied by BlackRock GPS vs. consensus estimates

2. Volatility no longer looks too high relative to financial conditions.

3. It's not obvious that political risk has dissipated.

Russ Koesterich , CFA, is Portfolio Manager for BlackRock's Global Allocation team and is a regular contributor to The Blog .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos

iShares

BlackRock offers breadth of capabilities - and depth of knowledge – across active and passive strategies, including iShares® ETFs. This is combined with a singular focus on delivering strong, consistent performance and an ability to look across asset classes, geographies and investment strategies to find the right solutions.

Learn More