Rough times still ahead for US
The US economy is facing the prospect of a hard landing in the near future, according to State Street Global Advisors’ UK chief investment officer Alan Brown.
However, Australia's economy may be in for a softer landing than the US economy, Brown told yesterday's ASFA Conference in Sydney.
Brown says that despite Australia's free falling dollar, the economy's low inflation levels and less overvalued stock market bode well for any strong downturn in the US economy.
"Australia's economy is showing some defensive qualities along with an undervalued currency," he says.
"We believe that Australia is likely to come back into favour with investors."
Brown also believes technology stocks are still overvalued and are set for further falls.
Despite predictions of a soft landing for Australia, Brown says stock markets around the world are unlikely to continue to produce the high returns of the past decade. The prospect of lower returns means the current levels of superannuation contributions are inadequate.
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