Tag: Markets

Posted on

A Global Market Correction? Why Experts Say the Clock Is Ticking

Market correction is due soon

The sense of unease rippling through global markets has grown steadily louder, and now several veteran analysts reportedly argue that the rally of 2025 may be running out of steam.

Their warning is stark: the ‘historical clock is ticking’, and the conditions that typically precede a broad market correction are increasingly visible.

Throughout 2025, equities surged with remarkable momentum, fuelled by resilient corporate earnings, strong consumer spending, and a wave of optimism surrounding technological innovation.

Weakening

Yet beneath the surface, the foundations of this rally have begun to look less secure. Analysts reportedly highlighted that geopolitical risks are approaching an inflection point, creating a fragile backdrop in which even a modest shock could tip markets into correction territory.

One of the most pressing concerns is valuation. After a year of exceptional gains, many global indices now appear stretched relative to historical norms.

When markets price in near‑perfect conditions, they leave little margin for error. Any deterioration in earnings, policy stability, or global trade dynamics could prompt a swift reassessment of risk.

This is precisely the scenario experts fear as 2026 unfolds.

Geopolitics

Geopolitics adds another layer of complexity. Rising tensions across key regions, shifting alliances, and unpredictable policy decisions have created an environment where sentiment can turn rapidly.

Some strategists emphasise that these pressures are converging at a moment when markets are already vulnerable, increasing the likelihood of a meaningful pullback.

Technical indicators also point towards late‑cycle behaviour. Extended periods of low volatility, accelerating sector rotations, and narrowing market leadership are all hallmarks of a maturing bull run.

While none of these signals guarantee a correction, together they form a pattern that seasoned investors recognise from previous cycles.

Don’t panic?

Despite the warnings, experts are not advocating panic. Corrections, they argue, are a natural and even healthy part of market dynamics.

They reset valuations, curb excesses, and create opportunities for disciplined investors. The key is preparation: reassessing risk exposure, diversifying across sectors and geographies, and avoiding over‑concentration in the most speculative corners of the market.

As 2026 begins, the message from analysts is clear. The rally of 2025 was impressive, but it may also have been the calm before a necessary storm.

Whether the correction arrives swiftly or unfolds gradually, the prudent approach is to stay alert, stay balanced, and recognise that even the strongest markets cannot outrun history forever.

A healthy correction is overdue.

Posted on

Markets on a Hair Trigger: Trump’s Tariff Whiplash and the AI Bubble That Won’t Pop

Markets move as Trump tweets

U.S. stock markets are behaving like a mood ring in a thunderstorm—volatile, reactive, and oddly sentimental.

One moment, President Trump threatens a ‘massive increase’ in tariffs on Chinese imports, and nearly $2 trillion in market value evaporates.

The next, he posts that: ‘all will be fine‘, and futures rebound overnight. It’s not just policy—it’s theatre, and Wall Street is watching every act with bated breath.

This hypersensitivity isn’t new, but it’s been amplified by the precarious state of global trade and the towering expectations placed on artificial intelligence.

Trump’s recent comments about China’s rare earth export controls triggered a sell-off that saw the Nasdaq drop 3.6% and the S&P 500 fall 2.7%—the worst single-day performance since April.

Tech stocks, especially those reliant on semiconductors and AI infrastructure, were hit hardest. Nvidia alone lost nearly 5%.

Why so fickle? Because the market’s current rally is built on a foundation of hope and hype. AI has been the engine driving valuations to record highs, with companies like OpenAI and Anthropic reaching eye-watering valuations despite uncertain profitability.

The IMF and Bank of England have both warned that we may be in stage three of a classic bubble cycle6. Circular investment deals—where AI startups use funding to buy chips from their investors—have raised eyebrows and comparisons to the dot-com era.

Yet, the bubble hasn’t burst. Not yet. The ‘Buffett Indicator‘ sits at a historic 220%, and the S&P 500 trades at 188% of U.S. GDP. These are not numbers grounded in sober fundamentals—they’re fuelled by speculative fervour and a fear of missing out (FOMO).

But unlike the dot-com crash, today’s AI surge is backed by real infrastructure: data centres, chip fabrication, and enterprise adoption. Whether that’s enough to justify the valuations remains to be seen.

In the meantime, markets remain twitchy. Trump’s tariff threats are more than political posturing—they’re economic tremors that ripple through supply chains and investor sentiment.

And with AI valuations stretched to breaking point, even a modest correction could trigger a cascade.

So yes, the market is fickle. But it’s not irrational—it’s just balancing on a knife’s edge between technological optimism and geopolitical anxiety.

One tweet can tip the scales.

Fickle!

Posted on

Markets heat up as the weather cools down!

Markets warm up

As the autumn chill of November sets in, the market seems to defy the temperature drop with a notable heated uptick in activity.

This phenomenon, often referred to as the ‘November Effect’, is a period where investors start to position themselves for end-of-year strategies, leading to increased market volatility and opportunity.

Historically

Historically, November has been a month where markets tend to show positive returns. Several factors contribute to this trend. Firstly, the anticipation of the holiday season boosts consumer spending, leading to higher revenues for retail companies. This optimism often spills over into the stock market, driving up share prices.

Secondly, institutional investors begin to adjust their portfolios to lock in gains for the year, a process known as ‘window dressing’. This activity can lead to increased buying, particularly in stocks that have performed well throughout the year, further driving market momentum.

Additionally, the release of third-quarter earnings reports in October sets the stage for November. Companies that have posted strong earnings results often see continued investor interest, propelling their stocks higher. Conversely, companies with weaker results might face selloffs, adding to market dynamism.

Tech resilience

Tech stocks, in particular, have shown resilience and growth potential, even amidst economic uncertainties. With advancements in AI, cloud computing, and cybersecurity, tech continues to be a focal point for investors. November often sees a renewed interest in these sectors, with investors looking to capitalise on year-end growth opportunities.

However, it’s essential to approach this period with a balanced perspective. While the ‘November Effect’ can present lucrative opportunities, it’s also a time of heightened market volatility. Investors should stay informed, diversify their portfolios, and consider both the potential rewards and risks.

As the weather gets colder, the markets heat up, creating a dynamic environment ripe with possibilities for those who navigate it wisely. The key lies in staying informed and alert, ready to adapt to the ever-changing market landscape.

Take informed financial advice from a professional qualified financial adviser.

And remember…

RESEARCH! RESEARCH! RESEARCH!

Posted on

Alarm bells sound for China as data indicates deflationary pressure

Deflation

Deflation or inflation?

China’s consumer price index (CPI) fell by 0.3% in August from a year ago, while the producer price index (PPI) fell by 4.4% last month. This is the first time since February 2021 that the CPI has fallen, and the 10th consecutive month that the PPI has contracted. This indicates that China is experiencing deflation pressure as demand in the world’s second-largest economy weakens.

Factors that contribute to the deflation risk

  • A prolonged property market slump, which reduces investment and consumption.
  • A plunging demand for exports, due to the global economic slowdown and trade tensions with the United States.
  • A subdued consumer spending, due to the coronavirus pandemic and rising unemployment.

Deflation can have negative effects on the economy

  • Lowering profits and incomes for businesses and households.
  • Increasing the real value of debt and making it harder to repay.
  • Reducing incentives for investment and innovation.
  • Creating a downward spiral of falling prices and demand.

The Chinese government and the central bank have taken some measures to stimulate the economy and prevent deflation.

  • Cutting interest rates and reserve requirement ratios for banks.
  • Increasing fiscal spending and issuing special bonds for infrastructure projects.
  • Providing tax relief and subsidies for businesses and consumers.

However, these measures have not been enough to offset the deflationary pressure, and some analysts expect more monetary easing and fiscal support in the coming months.

Deflation definition

Deflation is the opposite of inflation. It means that the prices of goods and services are going down over time. This may sound good for consumers, who can buy more with the same amount of money. But deflation can also have negative effects on the economy.

Deflation can be caused by a decrease in the supply of money and credit, a fall in demand, or an increase in productivity. To prevent or reverse deflation, the central bank and the government can use monetary and fiscal policies to stimulate the economy, much the same as we are now seeing to deal with ‘inflation’.