– Do not be surprised if you see a drop of 5 to 10 percent, says Mohamed El-Erian, chief economist adviser to Allianz, according to CNBC.
He believes that financial markets will fluctuate more over the coming months, and that the movements can lead to falls of around 10 percent in the future.
If it first starts to fall, he thinks the general acceptance that many stocks are overpriced can get the ball rolling faster when it’s first a minor decline.
At the same time he points out that development in the US presidential battle has not been discounted into the market and that there may be an additional risk premium if candidates like Donald Trump remains as a clear victory contender.
opposite direction emphasizes El-Erian that the capital injection by central banks and repurchases or mergers among companies can maintain high-priced stocks and also lead to further rise.
His views are confirmed by two analysts at Barclays.
two days ago wrote Hegnar.no that analyst Ajay Rajadhyaksha and Michael Gavin at Barclays believe we will continue to see major market fluctuations in the future.
analysts believe little will change until the summer and that we also in the second quarter will come to see as large fluctuations in the markets over the coming months.
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