BlackRock experts announced a reduction of forecast estimates on the European and American stock market to “neutral”.
Analysts at BlackRock, headed by Richard Turnill, chief investment strategist at the largest investment company in the world ($ 4.7 trillion under management as of March 31, 2016, according to BlackRock), in his comments on the 31st of May noted that the US and European stock markets are “no longer looking cheap” because of a number of negative factors, as well as with the allowance for the already passed growth in the stock and commodity markets.
Experts say that about since the middle of February, 2016 several factors shaped well for the US stock market: the expectation of sustained economic growth, the decline in real interest rates amid expectations of saving super soft monetary policy by the Fed.
But then real interest rates started to rise again. As BlackRock estimates, an increase in inflation in the US and tighter comments from Fed officials have made it even more likely for interest rates to rise during current summer. As a result, the company’s analysts also expect the volatility of the markets to increase in short term.
“We lowered the forecast on US and European shares to “neutral”. The shares no longer look cheap. MSCI World Index rose by 14% from its lows in mid-February 2016 as investors lost their fear of a global recession, the continuation of collapse in oil prices and the devaluation of the Chinese yuan.
According to our estimates, the cost levels of the US stock market are now above 70% of their long-term historical range. Stock markets seem to be more vulnerable to short-term risks. Among these risks there are more aggressive than expected increase in the US Fed rates; UK’s EU exit; deterioration of the migration crisis in Europe and a slowdown in the global economy.
We also see more modest prospects for future growth in China after economic activity has increased slightly and at the same time oil prices pretty much recovered”.
The EU budget has lost nearly $ 900 million because of scammers
The budget of the European Union in 2015 due to various fraud schemes lost about 888.1 million euros, according to the report of the European Anti-fraud Office (OLAF).
This is slightly less than in 2014 (901 million euros), but more than double exceeds the level of 2013 (402.8 million euros), the report says.
Experts recommend carrying out the procedure of “financial recovery” for these funds. The main part of them (624 million euros) was spent as subsidies and financial assistance to companies, including through various funds, and may be returned to the budget.
As a result of last year’s investigations by OLAF it became possible to compensate for the damage of 187.3 million euros, which is 10.2% lower than in 2014 (206.4 million euros). In 2013, funds in the amount of 117 million euros were returned to the budget.
OLAF is working to identify fraud in the expenditure of the European budget and to investigate corruption cases.
The budget of the European Union exceeded 141 billion euros. The expenditure of these funds is quite a significant problem, especially for the countries opposing European integration, BBC said.
Fraud is often associated with various subsidies and business assistance. The report of the Bureau has the examples of how these scams originate.
Thus, the Bulgarian company received from the European Agricultural Fund 1.3 million euros for the modernization of the refrigeration system for fruit and vegetables. It turned out that its owner is an Italian, who also owns the production of refrigeration units. As a result, the refrigerator was sold at an inflated price.
Leaders on the number of OLAF investigations last year were Romania, Bulgaria and Hungary.