Marc Ostwald, Market Strategist at ADM Investor Services, joined Zak Mir and Alan Green on the Tip TV Finance Show to discuss the struggle in trading such terrible events the world witnessed on Friday in Paris, as well as US inflation and emerging markets.
Key Points:
Paris terror attack had materially little effect on the global market or central bank policy.
Ostwald noted that the likely reaction to this is a knee-jerk rather than continued effect.
The financial market is already in emergency mode and has been since the crisis in 2008, thus with padding already in place in the global market, the events seen in Paris are unlikely to have drastic effect on financial markets.
In the longer term, Ostwald outlined that stock buy-backs and dividend payments funded by debt will come back to haunt us.
QE from central banks was pre-dated by emerging markets accumulating foreign exchange and assets, creating excess liquidity. Yet infrastructure within emerging markets remains poor as they haven’t developed within their own country.