Posted February 07, 2019 05:08:53The Wall Street International (WSI) is predicting that the global housing market is “ticking over”, with the global stock market plunging by almost a third, and the global real estate market by almost another third.
The Wall says that this is due to a combination of factors, including “the slowing down of new house construction, the weak fundamentals of the stock market, and slowing economic growth”.
It is also a combination, it says, of “a slowing down in the pace of home building, the rise in the price of home construction, and a decline in the level of equity demand”.
It cites the lack of “investment returns” in the US, a weaker dollar, as the main reason behind the drop.
But this isn’t the only factor driving the market’s slide.
The WSI also says that investors are losing confidence in the global economy and are less likely to take risks.
The WSI says: “Investors are increasingly reluctant to make large-scale, long-term capital gains in emerging markets, and are turning their back on emerging markets in favour of cheaper, riskier asset classes in developed markets.”
This means that investors have less confidence in their investments, particularly in emerging market economies.
It adds that investors in emerging economies are less willing to hold shares in companies and assets that are vulnerable to adverse developments in the market.
It also notes that many emerging markets are seeing “unexpectedly low levels of growth” and are “underperforming their economic potential”.
In particular, it points to the US as a country that is “reaffirming investor confidence in its global economy”.
This comes after the US central bank announced it would start pumping money into the financial system, in an attempt to revive the US economy.
But the WSI predicts that the Fed will be unable to help “with the long-run recovery in the United States”, and warns that investors may “lose faith in the Fed’s ability to provide safe haven for US dollar assets”.
This may mean that investors could turn their money into “riskier assets” such as commodities and other “emerging market assets”.
It also warns that “investors may begin to withdraw their funds from emerging market assets”, including “emergency funds and equity funds”.
And it warns that this may mean a drop in equity prices, which could in turn mean a “substantial reduction in investor demand”.
This is because investors are less interested in buying these assets, and because they are “more likely to invest in emerging-market assets”.
The WSIA says:”While the United Kingdom is the world’s most vulnerable emerging market economy, it remains a safe haven, where the majority of investors remain committed to safe haven assets”.
In fact, it is a “safer haven” that is attracting investors because of its relatively low levels in the world economy, and its relative lack of risk in the stock and bond markets.
It says:In this regard, the UK is also the most attractive “safe haven” to investors because the country has a relatively low inflation rate and relatively low unemployment.
So, for example, in June, the Bank of England raised its forecast for inflation by 1.5 per cent, which was down from 1.7 per cent in June 2017.