Market Review 17.03.2017:

The US market seems to slightly lose its winning streak after this closing week. It does not mean that the market is losing, but the market is an unpredictable figure churner that such a decline is already expected. Meanwhile, the European Central Bank keeps the current interest rates, which it said would be extended further in time. The program on bond-buying would most likely stay until December.

This week, the focus of this article would be on how to gain a deeper understanding of fixed-income investing. What could be deduced here in case of the bullish market happening in the US? Would it entail a losing side on other financial markets or would it boost the other markets’ upheaval?

Fixed Income Investing – What to make of it?

As an introduction, bonds offer fixed rates of return for a fixed period of time or an extended one, depending on the investor’s choice. Portfolios would mostly consist of bonds and stocks, which would entail the feature of a diversified investment.

What are the rewards from such risks then?

  • Generally, when rates increase, the risk for any return in bond investment also rises. As an observation, interest rates do not faze out modest returns from bond investing.
  • The rate may be too low at the current level of investing nowadays, but this is a fool- proof testament that bonds would still perform well when stocks are dropping. Bonds and stocks show an inverse relationship where, if one is falling, the other would rise. That is why bonds are effective shields against market volatility.
  • Stocks that are paying dividends provide a great assessment of a well-performing investment. Remember that dividends are not a guarantee of fixed returns because it is part of equity, and corporate discretion always comes into play.

A diversified portfolio really means enough buffer in case other types of investment do not work out. It acts like a leverage that would enable an investor to forecast and see any upcoming upsets and market flow for a better set of decisions to be made.

What should an investor do?

  • Assess what the component of your portfolio would be through proper allocations of how much would be in bonds or in stocks. Ask a legitimate financial advisor for better decision-making.
  • Diversification is a must, as it would contain different types of assets in each bond and stock classifications.
  • Bonds should be kept in varying terms of maturities. Short-term bonds are preferred for better investment positioning and determination.

 

Market Price Recap

Stock Index Closing Change from Last Week % Change
Dow Jones 21, 903.54 897.83 -0.05%
NASDAQ   5, 861.73   -9.02 -0.02%
S&P 500   2, 372.60    10.52 +6.00%
Russell 2000   1, 365.26   -28.87 -0.03%

 

 

Others Closing Change from Last Week % Change
Oil        48.43 -.31 -9.20%
Gold 1, 201.40  5.90 +0.49%
EUR/USD           1.0674 -0.0033 -0.31%
USD/JPY      114.78 +1.24 -0.20%

 

Stock Index Closing Change from Last Week % Change
UK FTSE 100 7, 374.39 31.31 +0.43%
Stoxx Europe 600     374.73   1.51 +0.40%

 

Stock Index Closing Change from Last Week % Change
Nikkei 225 19, 633.75   29.14 +0.15%
Shanghai Composite   3, 237.02   24.26 +0.76%

 

 

 


Market Forecast 15.03.2017

After a slight disruption in a straight winning streak of the US stocks last week, the economic report and labor market are still promising and optimistic. Rates would be released this week, and here is a takedown of what would transpire this coming week.

US Reports:

The real deal would be whether the rate hike this coming March 15 would be able to sustain the expectations of investors and the concerned public. This is a scenario where the rate would be beneficial, yet at the same time disappointing due to its inherent risk. The economy as noted by Fed Chair Janet Yellen, is operating under speculation and speculation alone. It has not reached the boundary of objectives reasonable enough to conclude its effectiveness. The setback would be on the US dollar, as it would not gain enough if the Fed decided to increase its rate.

As for gold prices, the coming week might add a slight indicator of short-term confidence on the increase of its trading price. Oil inventories are seen to continue their record high number, which could counter the falling demand for gasoline, which resulted from its dismal closing price last week.

The inflation report would likely cause more increase in interest rates, as relayed by Yellen. On the report to be released Wednesday, consumer prices are predicted to increase by 0.2%, due to the increase in prices for automobiles, clothing, and energy. This increase in prices of commodity indicate a trigger point for inflation rate increase. Unemployment claims still continue to be below the 300K mark, which sustains a healthy labor market for the country.

Japan:

The Bank of Japan would release its rate decision this coming Thursday. The bank’s governor Haruhiko Kuroda said that the inflation rate target of 2% might be taking quite a longer time to achieve. While the concern is looming over Donald Trump’s protectionist policy, Governor Kuroda said that the said policy would actually be able to boost economic growth around the world and in the US. How this would occur is still mere speculation and projections for export activities are looking good until the upcoming fiscal year.

UK:

The Bank of England would also release its rate decision on Thursday. The past report saw the benchmark rate for the bank being retained at 0.25% and the bank opting to retain its measures on its other monetary policy. The bank positively forecasted an improvement in the economy, which would result in a higher chance of a rate increase in comparison to not putting a cut on it. The economic growth prediction rate is set at 2%, together with a lower rate for unemployment. Brexit seems to keep the growth from halting, and the country’s policymakers could expect continuous growth for the coming months.

New Zealand:

The country would release its GDP data this coming Wednesday with a forecasted a 0.7% growth rate for Q4 of 2016. The last third quarter saw an increase in construction and consumer spending activities. The resulting forecast was triggered by a rising number of tourists, boosting manufacturing for tourist export and retail. Note also that the service sector took an expansion of 1.1% for the quarter alone.

As always, stay diversified and study the balance of an investment portfolio. Market volatility is a surefire miss, if not considered carefully.

 


Market Summary 10.03.2017

This weekly recap would be on a different side of the narrative compared to past articles. This week, it would be focused more on the things an investor should really know and consider. For a quick recap on the highlight during the past trading week, US stocks still continue its record high registry where the market was really optimistic.

The US Market Continues Gain Streak:

Optimistic data on the country’s economy drive the positive sentiment of most investors. Now that politics is again taking recognition and becoming a major a factor consideration in the market watch, the world would still follow any development as to how these short term gains would translate in the long run.

Stock Index Closing Change from Last Week % Change
Dow Jones 21, 005.71 183.95 +0.88%
NASDAQ   5, 870.75   25.45 +0.44%
S&P 500   2, 383.12     1.20 +0.67%
Russell 2000   1, 394.13   -0.40 -0.03%

 

Others Closing Change from Last Week % Change
Oil        53.01 -0.31 -0.58%
Gold 1, 232.50  5.90 +0.49%
EUR/USD           1.0590 -0.0033 -0.31%
USD/JPY      113.78 -0.24 -0.20%


Europe Sees a Positive Week Coming:

The export and import industry of the zone contributes to the positive gains during the trading week. In other news, Germany reached its highest level of inflation, which resulted in pressure on the country’s bonds.

Stock Index Closing Change from Last Week % Change
UK FTSE 100 7, 374.26 121.26 +1.67%
Stoxx Europe 600     375.23   5.71 +1.54%
Europe Dow 1, 621.06 +24.08 +1.55%


The Asian Market is slowly recovering:

China is looking forward to a solid contribution from its manufacturing and services industry. Economic policies would be laid out the coming week. Based on the last economic data, the country would be able to sustain a strong start and footing to be able to curb any financial risk and uncertainty. Japan, on the other hand, has enough income growth that would be able to counter the inflation. Meanwhile, the Bank of Japan is monitoring the implemented low rates as it hits the profit of financial institutions.

Stock Index Closing Change from Last Week % Change
Nikkei 225 19, 469.17 185.63 +0.96%
Shanghai Composite   3, 218.31  -35.12 -1.07%


An Investor’s Guide:

Remember to practice cleaning and de-cluttering in sifting through any financial advice and what the media reports. Sometimes, scratching only the surface could not provide definite satisfaction in terms of the answers and predictions an investor would really want to know. Currently, there is a lot of noise, gossip, and speculation, which in the end, just do not add up or worse, lead to bad decisions.

For an investor to easily assess some worthy news for business consideration, look out for these tips:

  • Global Economic News as a whole. The effect of certain news, especially when it comes to trade agreements, restrictions, and open policies does not purport to a specific area but to an interconnection of economic flow of value and importance. In the event that an influential market suddenly declares a certain policy that would affect the global economy as a whole, then investors should be wary and cautious as to their next move and decision.
  • Policies that are uncertain. Since the US is implying protectionism, the dice is rolling all over the market, which is affected by such restrictions (i.e. Mexico). When a certain policy takes effect, the world would surely implore fiscal measures and policies that would curb any negative impact on the country as a whole.
  • Focus on the real news and not the senseless noise. Always stay focused and diversified, as most financial advisors would say. With a lot of things going on, filter the news that matter and do not feed the hype. Always keep an eye on long-term investments and not on short-run gains. Rebalance the risk based on the investor’s appetite and remember to be cautious about every decision on the portfolio.

 

 


Market Forecast 7.3.2017

With most global markets gaining during the last few weeks, the markets releasing economic data seem to benefit from positive figures. Aside from that, monetary policies were implemented to curb any movement in inflation and equity investment uncertainties.

Global Rate Decisions:

The European Central Bank would release its rate decision this coming Thursday. It may seem that the ECB would keep the rate based on January and that the bond-buying effort would still be in place. ECB’s head Mario Draghi directly said that even if the Eurozone is getting more positive, time is still needed for it to fully recover. He further explained that more monetary and fiscal measures should still be considered to fully reach its desired recovery.

Meanwhile, the Reserve Bank of Australia would also release its rate decision this coming Tuesday. The February rate of 1.5% was still in place and as economists would say in the upcoming announcement, rates would likely be raised. Others would contradict the sentiment that since the inflation does not rise, then the rate should likely be more put down.

Global Market Outlook:

The Federal Reserve is still playing largely on the part of the economy, as many are prospecting another rate hike this coming March 15.

China might be able to gain a balance on its economy. The reforms were already showing significant movement as the export industry was slowly gaining. Other global economies might want to take advantage of the country’s growing consumer market, as optimistic sentiment could be drawn towards more spending, and the global trade focus could culminate in the coming years.

As for Europe, equities might show an improvement, as earnings were looking good and the hype on the zone’s politics might not pose a significant risk in the coming few weeks.

Canada would release its employment date on Friday. January reports an increase of jobs in the service industry while the unemployment rate registered at 6.8% against 6.9% last December. This means that the country is slowly recovering from oil price slowdowns, although the jobs created were mostly part-time, doubling its increase by almost 100% against increases in the full-time jobs created.

For a given fact, the US unemployment report registered the lowest figure, and this figure is surely a major factor for consideration in the Federal rate hike. The labor market in the US poses a healthy prospective; if maintained, this could lead to a record on full employment rate.

Currency Trade:

The EUR/USD for the coming week might continue its bearish streak, as Mario Draghi might be able to proclaim certain measures and policies that would further boost the economy and bring it back from its slump.

On the other hand, the USD/JPY is seen to be bullish the coming week. Despite the erratic effect of Trump on the country’s economy, strong export activities might be able to cope and produce more positive data figures for the country as a whole. With the upcoming release of Q4 figures, the market would likely respond and gear towards the bullish line on every market analysis tool.

In the end, market volatility plays a big part on what to normally consider in every investment decision. Trend analysis, forecasting tools, and other sophisticated market simulators could not even guarantee sure decision-making; they’re simply tools in making a wise one. Economic factors, political agenda, and the world’s reaction on the policies being implemented would all contribute to how the market would truly react and show significant figures are in making economic decisions.

Currently. it is to be considered that the short-term effect of the continuous market rally would not necessarily mean a reflecting factor on how it would translate in the long run. Being focused and diversified would surely put any investor on the advantage line.


Market review 3.3.2017

Amidst the alleged plans of the Trump administration of interest rate hikes fairly soon, the delay of its implementation has the U.S. dollar hitting a low.  United States Secretary of Treasury Steven Mnuchin announced last week that the Trump administration will implement a small percentage of the promised economic reforms, and the implementation will be delayed until August of this year. This has resulted in a mediocre performance of the U.S. dollar against other major currencies.

The political rumours in the UK about the Scottish referendum have also affected the pairing of the USD and the GBP.  It started out as a promising pairing at the beginning of the week, but it turned out to be an exercise in caution, at least until the rumours have abated. Many investors watched with bated breath whether the USD/GBP pair will continue to decline this week.  It continues its slight decline.  Although this is the case, the real estate market, durable goods orders and GDP data from both the United States and the United Kingdom has increased slightly, making the future of this currency pairing slightly brighter.

U.S. durable goods orders such as electrical gear and communications equipment rose the previous month, and are expected to continue rising all throughout March. There is in fact, an estimated increase of 0.5% monthly until December 2017. The United States manufacturing sector also showed an increased manufacturing PMI, and by February month-end should be at 56.1 points. The U.S. Services sector, on the other hand, has shown a bit of an increase as the employment index continues to rise in February. It is also good news for the U.S. oil sector, as crude exports continue to rise. When it comes to the U.S. market, investors need to keep a close watch on unemployment claims, as this might affect the standing of the U.S. dollar.

In the United Kingdom, the construction and housing sector continues to be bullish, and there is an expected increase in business during the next 12 months.  Although there is a decrease in export orders and new businesses, Manufacturing PMI output and prices charged increased. Because of the bright standing of the real estate housing industry in the UK, the business confidence of construction companies increased this year.

The pairing of the Euro and US Dollar also showed a bit of a decline this week. There are two significant political events to watch out for in Europe, and both of these will most likely affect the standing of the Euro. On March 15, the Dutch General Elections will be held.  If the PVV party is victorious, then the Euro will definitely be shaken.  The PVV party is in favour of The Netherlands leaving the European Union. On April 23, the French Presidential election will be held. If the political party Front National is victorious, its leader Le Pen promises a referendum of French nationals on EU membership. This will also significantly affect the Euro. Should the Euro decline, many financial analysts are recommending investors to rely on safe-haven instruments, and the popular ones right now are the Japanese Yen and gold.

On the other hand, the Australian Dollar and US Dollar pair has stayed on the periphery of the bullish trend line, albeit only for a short term. Many investors are still a bit wary about the negative reading of the Australian economy.  However, the economy of Australia is slowly bouncing back, and expected to recover in the next few months. Although there is an overall slump in most economic sectors, the agricultural sector gained 7.5 %, a figure which provided the much-needed offset to their numbers.

 


Market forecast 28.2.2017

For the week of 27 February, the Euro and US Dollar are both attempting to recover as it attempts an upward trend.  However, a downward trend is expected, and a flat trajectory is seen as momentum remains neutral.

The US dollar, however, closed last week moving up slightly a notch higher, so better days are expected ahead.  The US dollar lost ground last week against three currencies:  The New Zealand dollar, the Australian dollar, and the Japanese yen.

The market is still bracing itself to higher interest rates on the U.S. equity prices since newly-elected President Trump announced several times that he will implement tax reforms, and that these reforms will be announced in a matter of weeks. The aim of these tax reforms is to lower the overall tax burden on American businesses. However, implementing tax reforms will not be an easy road to pass in the U.S. Senate.  As a result, this delay could lead to a steady increase in interest rates.  Investing in the U.S. dollar may not be ideal during this time.

The Japanese Yen, despite overall slump in the past couple of months, is slowly gaining ground against the U.S. Dollar because investors are using this currency as a hedge. Many investors are also using the Yen as a hedge to brace themselves for the outcome of the upcoming French Presidential elections and the rumoured Scottish referendum in the United Kingdom.

Many market analysts are bullish over the British Pound and the US Dollar pairing, despite the fact that it slid down to 0.4%, its lowest level since February 15. Political changes in both the United Kingdom and the United States continue to make both currencies volatile, but financial analysts predict that both will be stable in the long term.

In the United States residential real estate sector, there was a considerable increase of brand-new home purchases across all states in January, and this is expected to climb up as the weather gets warmer, especially across the colder regions.  These January home sale figures are a significant increase compared to a lacklustre December. Home sales are expected to increase by .50% this coming week. The UK housing market, on the other hand, is expected to be in good shape despite Prime Minister Theresa May’s Brexit plans and other political instabilities. There is a forecasted slight increase in mortgage approvals in the UK this week.

The Euro is expected to be steady, with a forecasted 50% increase in the Consumer Price Index (CPI) in both French and Italian markets. The Spanish and Italian Manufacturing Purchasing Managers’ Index (PMI) is expected to slightly increase mid-week, while the French and German manufacturing PMI will remain steady, same as last week. When it comes to the services PMI for the Euro, there is an expected increase at the end of the week for Spanish and Italian services PMI, and the French and German services PMI, just like in the manufacturing sector, is expected to be remain the same as last week.

The pairing of the Euro and British Pounds decreased last week, though it also had significant gains.  At the beginning of the week, the GBP is expected to steadily increase.  However, with fresh rumours of a Scottish referendum affecting market decisions, the British pound is steadily weakening against the Euro, Australian Dollar, and U.S. dollar. The sterling will continue to steadily slide against major currencies until the concern for the referendum is abated. It is expected to stabilize once the news is confirmed to be unfounded. But in case of this eventuality, the Prime Minister should be ready to accept the consequences.


Weekly Market Review:

The global market report ending February 17, 2017 showed improvement on global equities. The US economy reached record highs during the trading week, which reflected strong economic growth. The International Monetary Fund is still doing everything to help Greece with its debt issue. The Asian market is mixed, with China having trouble regarding its debt while Japan is declining, yet still improving compared to past performances.

US Economy is Showing off Strong:

US stocks closed on record highs for the week in which Dow Jones leads the most while Russell 2000 fell short. As expected, the economic data released showed very favorable figures where core consumer price index and core retail sales hiked by 0.3% and 0.6%, respectively. S&P 500 registered increased total earnings, which is an optimistic trend if this would continue for every Q4 report.

Federal Reserve Chairwoman Janet Yellen sees a possible interest rate hike by June, after her Tuesday and Wednesday congressional testimony. Analysts beg to differ as to how much the hike would be after June.

On other news, Steven Mnuchin was appointed as the new treasury secretary by US President Donald Trump. Strong business sentiment could be fueled in the coming week, as Mnuchin targets a tax reform program. Policies would be unveiled in the coming weeks.

Stock Index Closing Change from Last Week % Change
Dow Jones 20, 624.05 354.68 +1.75%
NASDAQ   5, 838.58 104.15 +1.82%
S&P 500   2, 351.16   35.06 +1.88%
Russell 2000   1, 399.86   11.02 +0.79%

 

Others Closing Change from Last Week % Change
Oil        53.37   0.01 +0.02%
Gold 1, 236.00 -5.60 -0.45%
EUR/USD           1.0615 -0.0058 -0.54%
Russell 2000      112.82 -0.42 -0.37%

 

Europe is Facing Uncertainty:

The European Commission forecasted a slowdown on economic growth for countries under the euro currency, from 1.7% last year to 1.6% for the current year. The statement expressed was due to the issues they face, which include the Brexit’s effect upon its effectivity; the US upcoming trading and economic policies; and the election results for France and Germany.

The International Monetary Fund and the European Union have a few issues, bringing about a pessimistic result for Greece’s debt bailout. The country’s creditors would likely be unhappy if IMF would not be able to grant the €7 billion. If the said amount would not be granted, the country’s debt would be unsustainable, especially now that IMF would be focusing on other political agenda such as the upcoming elections.

Stock Index Closing Change from Last Week % Change
UK FTSE 100 7, 299.96 22.04 +0.30%
Stoxx Europe 600     370.22   0.12 +0.03%
Europe Dow 1, 604.42  -4.59 -0.29%

 

Asian Market – Mixed Trading Week with Heavy Underlying Issues:

The GDP report for Japan showed improvement, reflecting a three-year stretch. For the year 2016, the GDP growth increased by 1%, which was attributed to the increased demand for export, except for domestic consumption, which is still marking improvement. Economic meetings continued last week between Prime Minister Abe and US President Trump over policies, tariffs, and surplus.

China is facing issues regarding its financial stability where the country’s increasing reliance on debt is showing drastically. The reported debt figure registered at 3.74 trillion yuan or USD 545 billion. The Chinese government seems to understand the situation; thus, they would focus on maintaining the country’s stability over the coming week to avoid further debt crises.

 

Stock Index Closing Change from Last Week % Change
Nikkei 225 19, 234.62 144.00 +0.74%
Shanghai Composite   3, 202.08  -27.54 -0.85%

 

As an investor, decisions must not be based mainly on the policies–such as tax reform—that are deemed beneficial to businesses. Such policies entail potential loss or negative impact on earnings if they do not pan out well. Market volatility should always be considered due to the different economic issues around the world. Long-term goals should be the focus. Diversification of portfolios is the best way to remain focused and balanced.

 


Market Forecast:

Last week’s market performance was a mix of an optimistic US economy against the gloomy Asian and European markets. A lot of economic issues were setting a volatile market for most equity investments despite their advancing figures brought about by improvements in the US economy. The Greek bailout is yet to be confirmed, whether the IMF would be able to provide the amount the country needs. Here is an overview of what to expect for the coming trading week.

US Reports:

The US Crude Oil Inventory report would be released on Wednesday. Last week’s report dropped figures due to the output cut from refineries and the low demand for gasoline. Analysts forecasted, though, that in the coming weeks, demand for crude oil products would improve. Be it noted that in the last four weeks, there was an accumulated 8.43 million barrels per day decline in gasoline demand.

The Federal Reserve Minutes of Meeting would also be released on Wednesday. The report would entail the approval of interest rate hikes last December 2016, after the optimistic result of Trump’s win on the country’s economy. Economists purported that the economy would be able to achieve growth of up to 2.1% against the past year estimate of only 2%. Trump’s promise to spend more on infrastructure is believed to be a major contributory factor in improving the country’s economic growth.

Unemployment claims remain below the 300,000 mark, with a predicted figure of 242,000 registering the coming week, as opposed to 239,000 last. The unemployment report marks another positive business sentiment among investors, projecting a healthy economy.

Europe Reports:

The GDP data for the UK would be released on Wednesday with an economic forecast figure of 0.6% for Q4 2016. The Q3 GDP growth was 0.5%. There are several reasons for this growth, the main one of which is the country’s improved consumer spending. On the contrary, the construction industry is weak and does not add further variable for a strong GDP figure. 2017 is predicted to be slow in terms of economic growth due to higher living costs and a decline in various business investments.

The Eurozone Consumer Confidence would be released Monday with an improvement of -4.7 to -4.3. On the other hand, the Inflation report to be released on Wednesday is predicted to be 1.2% for January 2017 against 1.1% last December 2016.

Asia-Pacific Reports:

This coming Thursday in Australia, RBA Governor Philip Lowe is scheduled to testify in the House of Representatives Standing Committee on Economics. The testimony would include his stance on more spending to be focused on infrastructure. This would result in solutions for the country’s increasing population. Aside from that, he is against the US President’s barriers on trade policies, which the country mostly benefits from. Australia is on an open international trading system. He believes the country would be able to attain a 3% economic growth rate for the coming years. The mining industry, though, could see a downtrend in the coming months.

Despite a volatile Asian market being affected by Trump’s trade policy, equity investment could still provide a reasonable opportunity to put money into. Volatility rate is low in Asia. Bank policies may still continue per country. Meanwhile, China is starting to tighten its fiscal measures amidst rising debts.  According to many analysts, China is on the verge of an economic issue: its rising debt is overshadowing the slow GDP growth of the country. However, the effect would still not be realized until the full effectivity of US trade policies.

The global marketplace seems to again register a volatile week for investors who should decide correctly on their investment plan. Stay wise, invest diversely, and keep eye on the long-term game.

 

 


Market Review 17.02.2017

US stocks came in strong last trading week as it reported new record highs. The same is true with the European market as companies released their Q4 earnings. The Japanese stock market registered a slight gain over the week while China continues unfolding its economic pressure. Now, let’s have the details.

US continues to gain after a more promising policy on hand:

The profit-driven policies promised by the current administration pose promising gains over the trading week. The administration directly quoted “something phenomenal in terms of tax,” after a meeting with executive officers in the aviation industry. Another important factor that boosts the optimism in the US market is what analysts consider the administration’s willingness to cooperate with the Republicans. The aim would be the entitlement spending reduction where representatives would be agreeable as long as there will be no effect on the beneficiaries.

On other news, the energy sector believes that the oil prices would still struggle as the OPEC’s agreement on oil cut production would be balanced out by more options on oil drilling and exploration technology improvement.

Dow Jones closed at 20,269.37, up by 197.91 (+0.99%) while NASDAQ closed at 5,734.13, up by 67.36 (+1.19%). S&P 500 and Russell 2000 performed slightly well, closing at 2,316.10, up by 18.68 (0.81%) and 1,388.84, up by 11.01 (+0.80%).

Oil closed at $53.85 per barrel (+1.6%) while gold is at 1,234.70, a decrease (-0.17%) compared to last week.

European market slowly improves:

The European Central Bank is making headlines again as deregulation of the banking sector is on the top concern of their plans. Current President Mario Draghi said that US President Donald Trump’s relaxation of banking regulations might result in another global financial crisis. He further added that the ECB would still continue with the current monetary policies despite slight improvement in the Eurozone market. Other news report the volatility of European bonds, especially in Greece and France. The French Presidential election is coming to a close and it poses as a factor for volatility.

Japanese market optimistic;  China, on the brink of Crisis

Nikkei 225 closed at 19,378.93, up by 2.44%, showing positive gains over the week. Meanwhile, the Japanese yen showed strength early but by the closing day, it reverts back to 113.5,  better than at the end of last year. US President Donald Trump and Prime Minister Shinzo Abe held a two-day summit last week. The meeting shed light on where the Japanese economy stands, as US is its most important trading partner.

China, meanwhile, is doing everything it could to salvage the declining Yuan. Investors were pressuring the country as most of them were moving out money from the country, leading further to the Yuan’s decline.

 As an Investor:

Monetary policies around the major global market are all trying to implement balanced and sustainable measures that would promote growth and sustainability. Setting aside the fact of the strengthening dollar, economies should be viewed in a holistic way, particularly in dependent countries where its currency is weakening due to the former scenario. This will enable proper assessments to be made.

Global markets are now driven by a slow-paced growth across other markets. Needless to say, the US economy growth is fast enough as more optimism is  driven towards its economic policies.

The equity market would be volatile in the coming weeks as earnings, elections, new policy measures, and political agendas are laid out for every analyst to see. Always focus on the long term goal and always diversify.


Market Forecast 14.02.2017:

The US stocks closed on a positive note last trading week, as investors were more optimistic about President Donald Trump’s pro-business monetary policy plans. The European market slightly improves while the ECB keeps on tracking the effect of the policies in place. The Asian market had a mixed trading week where Japan is slowly tracking improvement. China was re-assessing its policies to solve short-term fallouts.

Here is a take on the highlights for the coming week.

US:

Federal Reserve Chairman Janet Yellen will meet with the Senate Banking Committee for the Semiannual Monetary Policy report on Tuesday. The testimony may contain discussions on putting a halt on increasing interest rates, as the global market is slowly falling, due to trade restriction policies and the strengthening of the US dollar. Although the US is steadily improving in employment and wage growth, other global markets might not be able to do so.

The Retail sales report to be released Tuesday is forecasted to hike by 0.1% for January 2017 and a 0.4% increase for core sales. President Trump’s policies over bank regulations and tax cuts would certainly factor in the increasing economic growth and increased consumer spending. Reported December gains benefited from increased sales in furniture and automobiles.

The Inflation data report would be released on Wednesday where the forecasted rate for January would be increased by 0.3% for consumer prices and 0.2% gain for core CPI. The December 2016 report saw a rate increase of 0.3% for consumer prices. If the rate reflects the coming week, this would be another notch higher from the past two years with regards to the country’s inflation rate.

The unemployment claims report to be released Thursday improves its figure from the Feb. 4 report with an astounding 234,000. That could be said based on analyst reports that the unemployment rate is on a nine-year low, with 4.8%. This says that the country is reaching a healthy labor market, with the rate reaching max employment.

Another optimistic report to be released on Thursday is that of building permits. Economists are highly positive as housing construction registered the highest annual demand from 2007.

The closing price for crude oil products slightly ticked up. The US Crude Oil inventory report would be released Wednesday.  Due to the rising demand, stocks registered a high number of 13.8 million barrels against the forecast of 2.5 million. Oil prices would likely continue to rise despite the high number of stocks and imports, which could be balanced out by the high demand for usage.

Japan:

The country’s GDP data would be released on Sunday. For the Q4 of 2016, the expected report to reflect would be a growth rate of 0.3%. Q3 reports suggested slowly improvements and recovery in terms of wages and employment. On the other hand, the main triggers for the slow economic growth of the country were the restrictions attached to new trade policies by the US and China. Despite that, rising export demands could sustain much needed optimism for the country’s economic improvement.

Europe:

The UK’s inflation report data would be released on Tuesday, with a January 2017 CPI forecasted increase of 1.9%. Last month’s report registered an increase, which would be attributed to the rising prices in food and airfare. Following the Brexit issue, it is expected that prices would continue to affect consumers while the pound weakens.

Germany would also release the GDP report this coming Tuesday. It has an expected growth rate of 0.5% for Q4 2016. However, the underlying concern would be US trade restrictions where the country relies on export activities. Germany’s slow growth could still have another problem where the UK’s exit from the EU would pose a big effect on domestic economic activity.

Stay diversified and focus on the long term goals. Short term policies would contribute to short term effects. but looking at the holistic level in a portfolio would aid better in decision-making. Global markets, especially the equity investments, are volatile so learn to balance the mix and ratio of an investment.

 

 

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