With Greece, China and rate rises heightening fears, will this be a bad summer for investors?

The Greek crisis will rumble on (Source: Getty)

Laith Khalaf, senior analyst at Hargreaves Lansdown, says Yes

It has been a pretty bad summer for the stock market so far – and we would have to have a belter of a month in August for the FTSE to claw its way back to the 7,000 mark. I do not see the macro worries abating that quickly or that decisively. We’ll likely see the Greek crisis rumble on for some time yet and, where China is concerned, there are more bears than you’ll find at that oft-sung picnic in the woods.

Meanwhile, falling commodity prices continue to weigh down on the oil and mining companies that make up so much of the UK’s domestic stock market. Having said all of that, I don’t think it’s a bad time to invest. Indeed, I have used the recent market falls as an opportunity to put more money into the stock market. The key is to understand that it may get worse before it gets better. But in 10 years’ time, the troublesome summer of 2015 will look like a storm in a teacup.

Alex Dryden, global market strategist at JP Morgan Asset Management, says No

Although markets continue to pay attention to a number of issues, it should still be a sunny summer for many investors. The recent volatility in Chinese domestic equity markets has been extreme, but many of the excesses have been contained to the A-Share index, which is closed off to most international investors. The risk of contagion is thus limited. Meanwhile, the threat posed by the Greek debt crisis looks to have receded.

Despite some residual Grexit worries, the European economic recovery continues to pick up speed, providing a strong backdrop for regional equities. Finally, the prospect of a US interest rate rise in September could also cause some volatility.

However, the Federal Reserve has gone to great lengths to prepare investors for a rates lift-off, so markets should take it in their stride. Therefore, while investors should always be wary of rain clouds on the horizon, the sun should keep shining on markets over the summer.

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