According to Capital Group’s Timothy Armour, international markets are presently experiencing fast economic growth, high inflation, and escalating interest rates. Tim noted that after the election of Donald Trump in the U.S., the markets exhibited signs of fatigue, equities struggled to remain high, and the bond markets were still stabilizing in the aftermath.
Some assets managers have remained skeptical that Donald Trump’s election will end the sluggish economic growth and subdued interest rates that have reigned since the 2008 financial crisis. Tim Armour warns that it is often difficult to spot market regime changes and added that managers should expect more turbulent times ahead.
Evident Facts of a Downside
Armour, however, warned on the uncertainties that often come with market regime changes correlating it to the incoming and uncertain government policies. He also identified a significant shift in the stock markets. Banks were striving and doing well while real estate and utility sectors were growing weak. S&P’s 500 utility stocks remained subdued since the election whereas real estate and financial companies gained 2.3% and 16% respectively. Gas and oil drillers are stated to have increased by 38%.
Armour concludes by citing that money movement between industrial sectors in an attempt to beat the market has by far been amazing. He added that the flip side of this was that investments that were sensitive to interest rates and doing well in the past few years had begun to take a downward spiral.
Timothy “Tim” Armour is the present Capital Group’s Chairman and Chief Executive Officer. He is also the CEO and Chair of the group’s subsidiary called Capital Research and Management Company as well as its Companies Management Committee. The equity portfolio manager has three decades of investment and financial experience all under Capital Group. He started his career at the group after being selected to participate in its Associates Program. Later, he was retained as an analyst focusing on equity investments.