Shares slump timing queried

Stockmarkets and other global risky asset markets may not be overvalued because of a “structural decline in real interest rates which is likely to endure”, says Capital Economics.

In a major report of developed and emerging markets, the London-based economists said real interest rates were the key to understanding that investors’ exuberance was “rational” after all.

“Admittedly, we think that the upside for risky assets is limited and that a pullback is likely in some cases. But a big cyclical correction is unlikely before 2019, when the US economy may be faltering,” the economists said.