chief investment strategist, Russ Koesterich, writes about three possible risks that could derail the market rally in ETF Trends
. Koesterich said the Fed tapering may not derail the rally, because there is little evidence that the economy is "taking off." despite the June unemployment report, but other factors could halt the rally.
Much of Europe is still stuck in a recession, the banking system is fragmented and austerity measures are wearing thin with the populace, especially in Portugal and Greece. Koesterich writes. News in the middle east doesn't bode well for investors either with the collapse of the Egyptian government, the Syrian civil war and increasing oil prices.
And about those rates under 3 percent that Koesterich expects: It may not happen after all. If rates rise more severely, equities may be hurt as they would cut into corporate margins, slow the housing recovery and make Treasuries more appealing. In sum, if you're looking to equities in a rising rate environment, you'll be exposed too.
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