As we begin Q4, in this morning’s article I want to share my thoughts on Q3 and what we can expect going forward💡
At the beginning of Q3, the Stock Markets were recovering from a low point in June, which continued until the end of Q3 and this deteriorated again by mid-September📈
It’s been a difficult year for stock market investors due to high levels of inflation and Central Banks increasing interest rates📊
Investors have been worried about the global economy in the Western world with high levels of consumer business and government debt.
Increasing interest rates will make it more difficult to service.
It will also dampen economic activity as we can see locally in the mortgage market, mortgage transactions have dropped by about 3% to 4% on the basis that mortgage approval amounts are lower due to higher interest rates.
So, again from an economic point of view globally, we haven’t gone into recession.
There isn’t a recession from a global economy next year forecast either.
From an Irish point of view, we’re expected to have 9% economic growth in terms of GDP growth this year and a strong year next year as well.
Likely that will be pushed on by the multinational sector and I think in the domestic economy, particularly for consumers moving into the winter with energy bills increasing I think it will feel probably like a recession but from an economic forecasting point of view, it’s not expected to happen.
Some European countries are expected to go into recession but the US isn’t expected to.
From a stock market point of view, it’s difficult to see an improvement of the stock markets in the short term.
I think investors will look to see interest rates stop being increased and inflation start a trend downwards now.
The forecast for inflation is for it to start to decrease but remain on a high level so, moving from say maybe 8% to 9% towards 6% next year and then down towards 4% to 4.5% the following year depending on the region of the world, more the Western world.
A number of commentators have started to point out that from a long-term point of view there is value in the markets at the moment.
So, for investors and pension investors, it’s about remaining invested and cash in the recovery.
There is an opportunity to make investments now as commentators have pointed out.
From an economic point of view, we’re expected to skip a recession but I think certain parts of the economy particularly consumers in the Irish economy will feel a pinch with the energy bills coming into the winter.
If you found this article helpful and would like to learn more about how to protect your finances, feel free to connect and start a conversation or contact me directly at +353 (87) 778 5325☎️
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