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05-Feb-2018<br />

Stocks 'may tumble 10%'<br />

MSN UK<br />

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Watch: Global equity slump deepens<br />

Equity investors are in for a further stomach-churning down-draft, but it will pay off to stay<br />

the course, according to AMP Capital Investors Ltd.<br />

“It’s likely the pullback has further to go as investors adjust to more Fed tightening than<br />

currently assumed,” said Shane Oliver, Sydney-based global investment strategist at AMP<br />

Capital, which oversees about A$179 billion ($141 billion). “The pullback is likely to be just<br />

an overdue correction, with say a 10 percent or so fall, rather than a severe bear market.”<br />

Oliver forecasts equity returns will remain positive in 2018, despite greater levels of volatility.<br />

While the MSCI All-Country World Index is down about 3.6 percent from its record high<br />

reached Jan. 26, it remains up more than 3 percent since the year began.<br />

Earnings growth and gains in consumer spending fueled by wage increases will ensure<br />

economic expansion remains on track -- as long as runaway inflation doesn’t cause the<br />

Federal Reserve to tighten policy too fast, Oliver said. His proviso on avoiding a bear market<br />

is that the jump in bond yields isn’t “too abrupt and recession is not imminent in the U.S.”<br />

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