Fund managers are cautioning that equity markets may face a difficult period in September, citing concerns about high valuations amid a backdrop of slowing US economic growth and substantial government borrowing worldwide. Historically, September has been the least productive month for global stock markets. Australia’s S&P/ASX 200 Index has already declined by nearly 3 per cent since surpassing 9000 for the first time in late August.
In contrast, the three major indexes in the United States have performed comparatively better, having reached new record highs this week. However, investors remain uneasy, with President Donald Trump’s persistent criticism of the US Federal Reserve adding to the uncertainty. Trump has repeatedly pressured Chairman Jerome Powell to lower interest rates, increasing market anxiety.
Additional concerns revolve around the potential inflationary effects stemming from US tariffs, substantial tax cuts, and extensive spending initiatives within the world’s largest economy. These factors collectively contribute to the cautious sentiment prevailing among investors as they navigate the current economic landscape.
