Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892
The outlook for the world economy continues to strengthen, particularly in the formerly moribund eurozone, and it provides greater support for growth-oriented assets. But valuations remain expensive across all asset classes, and are vulnerable to an eventual normalisation of interest rates, which is already under way in the United States and the United Kingdom, although it is still some time away in the eurozone and Japan. Investors also appear overly complacent about potential risks that could kick away the props for today’s expensive valuations. In Australia, official and private-sector data point every which way, and while there are some hints, it is still not clear that the economy has moved into the higher gear that would support improved growth asset prices.
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