According to Tim, a period of faster economic growth, increasing interest rates, and inflation is impending. President Trump’s election has caused significant changes in asset prices. Equities are yet to set new highs, and the bond markets have not stabilized.
Tim says in his career, interest rates have been decreasing most of the times and not the opposite. He says that these market changes are massive and real. The market is expected to experience more turbulent changes due to uncertainty on the various government policies.
Tim says that globalization is facing challenges and no one knows what will be the effect. Markets are facing significant changes as a result of increased populism.
Growth-sensitive industries in the stock market are roaring higher, while defensive sectors are languishing. Since elections, the real estate shares have recorded a 2.3 per cent gain while financial companies and gas drillers have recorded a 16 per cent and 38 per cent increase respectively. This major shift is taking place in the stock market in the post-Trump era.
Tim Armour’s Perspective on Market Selloff in September 2015
In 2015, global stocks tumbled due to China’s slow economic growth. A reduction in Chinese stocks was coupled with currency depreciation sent fears to investors in other economies. This forced the Chinese government to lower the interest rates and ease banks’ reserve requirements.
Tim said that it was better for the Federal Reserve to increase interest rates. He also noted that China was the primary catalyst in that market tradeoff. Previous high economic growth rates in China had enabled her to contribute to global growth.
Therefore, a decline in China’s economic growth meant a reduction in the world economic growth hence affecting investments worldwide. Slow growth or no growth in China would have adverse effects on other markets.
Timothy Armour’s Education and Work Background
Timothy D. Armour, alias Tim attended Middlebury College for his Bachelor’s Degree in Economics. In 1983, he began his profession as a member of The Associates Program at The Capital Group Companies, Inc. He then became the company’s Equity Investment Analyst. Currently, he works at The Capital Research as the Chairman, Director, and Principal Executive Officer. He is also the Equity Portfolio Manager and Chairman of the Capital Group Companies, Inc.