While concerns over the recent US Federal government shutdown has been laid to rest, capital markets cannot discount an adverse impact stemming from a correction to Wall Street’s current bullish state.
This is in view of the correlation between global markets and asset classes that has become increasingly obvious since the 2008 Global Financial Crisis which emanated from the US subprime mortgage market and how it evolved into a full-blown international banking crisis with the collapse of investment bank Lehman Brothers.
“Asian markets will certainly correct correspondingly but in a lesser quantum although the fall in emerging markets can be sharper,” opined Affin Hwang Asset Management Bhd managing director Teng Chee Wai.
Teng, who presided a 2018 Market Outlook media briefing, was commenting on the record-breaking spree of Wall Street’s major indices led by the benchmark Dow Jones Industrial Average index which has since surpassed the 26,000 mark.
