Not All Doom and Gloom: Positive Factors for '09
Investors could be forgiven for keeping clear of the markets following one of the most turbulent years in recent history, but the positive factors developing are becoming ever more compelling, John Haynes, strategist from Rensburg Sheppards, told CNBC.
“Amongst all this blizzard of nastiness going on, what one is losing focus on is there an enormous weight of positive impetus also being added to the other end of the scales,” Sheppards said.
Widespread fiscal stimulus from governments all over the world is adding up to a formidable wave of liquidity, according to Sheppards. And dramatic falls in interest rates in the U.S., Europe and elsewhere are adding to the effect, he said.
(Watch the full interview with John Haynes above).
The Federal Reserve slashed the U.S. base rate to practically zero in December and the Bank of England the European Central Bank seem to be close behind in terms of easing monetary policy.
“It’s having real effects on the price that consumers have to pay for credit,” Sheppards said.
Easing inflation and a sharp decline in the price of oil are also improving the economic outlook for the world economy, Sheppards pointed out.
“Those are new positives that weren’t there last year, that are working their way into the system,” he told “Squawk Box Europe.”
Sheppards also highlighted the importance of corporate deleveraging, saying: “this is not a new phenomenon, we’ve been taking risk off the table as fast as we possibly could for well over 12 months.”
Sheppards thinks that ccorporate credit is the best way of playing the current situation. Despite being a “crowded trade,” it has the best risk reward, he said.
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