Massive price falls

Expert reassures: no crash, just an “outlier”

On the world's leading stock exchanges - such as here on New York's Wall Street - the massive slump in share prices caused headaches.(Bild: AP/Richard Drew)

After the price slump on the leading international stock exchanges on Monday, the stock markets started with a plus again in pre-market trading. Stock market expert Monika Rosen is reassuring: she does not see a stock market crash, even though the leading Japanese index has fallen by around twelve percent.

Rather, special situations in Japan and hesitant interest rate moves in the USA are responsible, Rosen said on Tuesday's Ö1 "Morgenjournal". 

Counter-movement after "very, very sporty" price rises
The stock market expert described the price rises in the first half of the year as "very, very sporty", especially in Japan. In this respect, there was certainly room to the downside. "That was perhaps an outlier after all," said Rosen.

Rosen did not want to describe the development as "predictable", but she did point to factors such as an incipient economic weakness coupled with an interest rate hike. The stronger yen is also poison for Japan as an export nation. In her opinion, the susceptibility to fluctuations will continue, but "I would not see a crash".

US Federal Reserve too hesitant
According to Rosen, who is also Vice President of the Austrian-American Society, the US Federal Reserve has taken too long to cut interest rates. The fact that the economy is cooling down after the sharp interest rate hikes is regrettable - especially for those who have lost their jobs.

Stock market expert Monika Rosen does not see a crash, but is harsh on the US Federal Reserve.(Bild: Krone KREATIV/Klemens Groh)

"There are market participants who believe that the Federal Reserve will make an extraordinary rate cut," said Rosen, but she expects a rate cut at the next regular date in mid-September. The only question is how much: a quarter of a point or even half a point are being discussed. Further cuts should then follow - if the labor market data turns out accordingly.

Tech hopes "somewhat exaggerated"
Expectations in the tech sector, and in artificial intelligence in particular, were high. As Rosen noted, hopes for technology were somewhat exaggerated. However, it is not just a few tech stocks that will receive a "tailwind" on the stock market, but also entire sectors.