Citigroup, Inc (NYSE: C) Private Bank Global Chief Investment Officer Richard Cook said that global equities are set to fall as countries around the world end their stimulus measures which will result in a slowdown of economic growth.
“It’s highly likely that markets have already peaked,” commented London-based Cookson, whose company has more than $220 billion of assets under its management globally, at a press briefing in Singapore. “Earnings growth estimates next year are still double digit. That’s going to be a stretch.”
The MSCI World Index is up about 80% from a 13-year low in March 2009, compared to this year’s high on April 15th as central banks have cut borrowing costs and as governments have engaged in unprecedented stimulus spending to help the economy recover for the worst recession in modern history. The MSCI World Index has declined on speculation that China may try to cool its properly bubble and worries that Europe’s debt crisis may hurt growth globally.
“I suspect that bits of Europe are going to go into a recession,” said Cookson, who joined Citigroup from HSBC Holdings in March of this year. “Growth assumptions are going to come under pressure” as governments withdraw stimulus measures.
Sovereign debt in concerns have mounted in European countries, resulting an environment in which investors are dwelling on negative developments despite economic data suggesting a recovery is on the way. E.U. leaders announced a $1 trillion loan package in may after Greece’s deficit expanded to almost 14% of GDP growth, far exceeding the European Union’s limit of 3 percent.
