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 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 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.

 


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 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.


Weekly Market Summary 10.2.2017

Nothing really changed much during the trading week, as stocks closed flatly from last week’s performance of the US market. The rest of the major global markets performed well, gaining in comparison to last week, except for the slightly lower figures for the Asian market.

US Stocks Closed, Slightly Unchanged:

US stocks underperformed during the week despite good news coming in from the employment and manufacturing reports. President Trump’s immigration ban sparked different sentiments, which could be identified as a factor causing the sluggish performance of the US stocks. It should also be noted that despite the release of favorable Q4 earnings reports, some companies have no assurance that their related stock prices hiked their values. The US Fed kept monetary policies unchanged.

Dow Jones closed at 20,071.46, down by 22.32 (-0.11%), while NASDAQ closed at 5,666.77, up by 5.98 (+0.11%). S&P 500 and Russell 2000 performed slightly well, closing at 2,297.42, up by 2.73 (0.12%) and 1,377.84, up by 7.13 (+0.52%).

Oil closed at $53.84 per barrel (+1.3%) while gold did at 1,221.60, on a down (+0.18%) compared to last week.

European Market Poses Weak but Improving Gains:

The European market seems to perform well this week. Financial sectors within the European region aim for more lax banking and fiscal regulations to boost their economies. On other good news, the Eurozone report of GDP improved by 1.7% for the year 2016, surpassing the 1.6% rate of the US. It would be attributed to a 1.8% increase in consumer prices, with oil prices getting back on track. Another would be a seven-year record streak of low unemployment rate for the year. Greece is back on the spotlight again with the IMF predicting an “explosive” effect of the country’s debt by 2030. The country should be doing everything right now, as many analysts are concerned that a potential financial crisis may happen in the zone. The UK has voted to initiate the start of the Brexit process, with the deadline looming on March 31.

Stoxx Europe 600 closed at 364.07, up by 0.59%; Europe DOW at 1,610.02, up by 0.15%; and FTSE 100 at 7,188.30, up by 0.67%.

Asian Market Improves:

The Japanese market closed lower, compared to last week at 18,918.20. The Bank of Japan is performing measures reassuringly to yield curve control. The yen to US Dollar trading closed at 113 yen per dollar, which marks an improvement against the 117 Yen to the dollar last year. In relation to this, the Bank of Japan still decided to keep the bank’s policy unchanged. The interest rate is still at -0.1%. The move is backed by the bank’s belief of a stronger economic return until March 2019, adding to the unpredictability of deflation. On other Asian markets, China opens the year 2017 disappointingly in comparison to last year in terms of manufacturing figure reports. Although the country is performing well, the Chinese Central Bank’s implementation of stricter fiscal policies slows down the economic movement of its business activities.

 

As an investor, the following should be duly noted and taken into consideration for long-term investing:

  • Adjustments should be given room. Policies and new measures to be implemented among fiscal agencies and monetary authorities would bring volatility and uncertainty in the global market. These would either uphold or take down existing improvements and create newer imbalance in trading.
  • Focus on a diversified portfolio. Rallying stocks get a record high every now and then. Therefore, putting a portfolio in a position that would reap long-term viability is the best tactic to take advantage of on such rallies. Balance the portfolio by determining which of the assets are underperforming. and adjust it by placing more of the performing ones.
  • Portfolio balance is important. Uncertainty, market volatility, and drastic economic measures would affect a portfolio any time of the day. Getting a balanced structure of equity and fixed-income class of assets would certainly make a viable investment account stand for a longer term.

 


Weekly Market Review 3.2.2017

A good trading week over the US permeated after Dow Jones closed at 20,000 level. Other US indices also struck record highs, which mean that the US is expecting results of a better economic outlook and positive sentiments among investors. European stocks are waiting for the release of reports on earnings before any significant movement and decision could be made. Asian stocks, especially the Japanese indices, are performing well, but China’s economic outlook is viewed on the pessimistic side.

US Trend Kick-off:

Dow Jones really kicked-off upon reaching 20,000 by Thursday and closing at 20,093.78, with a +1.3% change. The same also reflected with S&P 500 and NASDAQ, closing in at record high with 2,294.69 (+1.0%) and 5,660.78 (+1.9%). Russell 2000 favorably closed at 1,370.25 as well. The said figures were attained after a positive earnings report was released and investors were feeling optimistic towards the US economy.

Record highs and impressive figures are not the only factors to be considered here, but as an investor, sustainability should be noted as well. The economic policies that would be implemented under the current administration aims to improve economic spending and ease up on tax burdens among businesses. Note that such policies would not take immediate effect, as this would take time–until late this year or the coming 2018. In addition, the market would pose more volatility as every economic policy to be implemented would either be a hit or miss. It could also be divisive and downward and not beneficial at all. Record highs are not a guarantee of continuous rise, but just the start of a cautious trading effort. Be mindful of selling when the trend continues. Sticking to the strategy is the best action to take.

The European Market is on a Waiting List:

Brexit is in full force despite the Supreme Court’s ruling that the parliament has a vote about starting action on Article 50. The issue regarding Brexit’s economic impact has not yet reflected, based on the 0.6% growth in the Q4 GDP and an overall rate of 2% for the year 2016. Prime Minister Theresa May would meet with US President Donald Trump for a discussion on trade agreements. In relation to the SC Ruling, she said that the said rule would not affect the Brexit process.

European earnings are expected to be published in the coming weeks; thus, the European market is not quite as volatile as it appears to be. US President Trump’s economic policies have a big influence on how the European market reacted towards its business growth-filled agenda. In other related matters, Stoxx 600 closed a record high based on its 11-week trading.

Asian Markets were Mixed:

Japan performed well where Nikkei 225 closed at 19,467.40, up by 1.7%. Exports recorded a 5.4% increase from last year despite US President Donald Trump’s withdrawal from the Trans-Pacific Partnership last Monday. Governor Haruhiko Kuroda of Central Bank is optimistic that global economy would recover and Trump’s withdrawal would not affect Japan’s economic trade.

China is rating negatively as the country is on the verge of a financial crisis, with its economic growth relying on credit. The country’s short-term growth focus puts it in a substantial position to make its economic growth go at a slow rate. Thus, the country should consider a lot of options to sustain quality growth and push consumption and services.

Other News:

Canada is up for renegotiation with NAFTA where the possibility of keeping its interests first before Mexico’s is what’s circulating around. This means that Mexico is on its own in terms of bargaining on how the trade practices would push the US.

The EUR/USD exchange rate closed at 1.0699, with a 0.0015 change from last week.

Oil closed at $53.12 per barrel (+1.3%) while gold is at 1,193.70 down (+1.2%) compared to last week.


Weekly Market Review Jan. 27, 2017

US stocks closed lower again, compared to last week.  Donald Trump is also formally inaugurated as the new President. The global market seems to wait for the effect of the policies that Trump would enact during his administration. The focus during the trading week is all on the new president where investors and other related parties are closely monitoring any uncertainty and possible market volatility during Trump’s term.

Global Market Recap

Europe

The Brexit issue still looms over the UK area as Prime Minister Theresa May made clear of the vote being put on the coming week. The vote would block the parliament deal whose aim is to maintain control of the UK’s labor movement and migration, together with the ability to trade in the European Union as a single market. Analysts note that the full effectivity of the exit would take at least two more years, and the move’s impact would certainly fall upon public consumers and business establishments.

Interest rates are still kept low by the European Central Bank, together with its implemented stimulus program as per the meeting last week. Mario Draghi, ECB President, made the unchanged announcement. Despite this, the European market could weaken after a weak retail report from the UK, which is attributed to rising commodity prices. If the trend continues like those for gas and oil, consumer spending would be affected and would lead to a wider scope, affected by a weakening economy.

Asia

Japan has a losing and winning streak over their currency’s disposition to the US dollar. The Japanese market is strengthening over its weakening currency. Japanese exporters are gaining, as businesses that get paid in US dollars are taking advantage of the high exchange rate. Analysts stated that 2017 would provide an unmoving trend both for the weakening currency and the stock prices, which are about to soar up.

China has good news to look up to as the gross domestic product target for 2016 was hit with 6.7%, despite the slowest rate way back in 1990. The said slow-down for the target was due to a lot of monetary policies that have been implemented, only to benefit in the short-term period. This includes increased spending for the consumers and lax credit policies. Be it noted also that the main factors for their economic slowdown are from high debts and full capacity on the industrial sector. The International Monetary Fund has provided an advice and warning that China’s continued policies may either push faster economic slowdown or unfavorable adjustment for the economy itself.

Despite a lot of measures being implemented by China, the title for fastest-growing economy went to the country, dethroning India. The reason for India’s title strip was demonetization. The said move removed the circulation of almost 90% of their currency. That is why, IMF cut their growth forecast to 6.6%, coming from 7.6%.


Weekly Market Review January 20, 2017

The trading week for January 9 to January 13, 2017 is the trigger point for the preparation of the Q4 results, and more sentiments are to be expected for most industry and individual corporations. This week’s recap would focus on the 2017 outlook, particularly on the different factors to consider in pushing through with smarter investing tactics and moves.

The Q4 Reports Hold the Prospect of Continuity

For US-based companies, optimism holds up for the best component of a good outlook towards the year 2017 regardless of what the Q4 reports indicate. The upcoming president- elect pushed for a strong policy to lower tax rates and for more spending on infrastructure. This triggered a higher confidence among businesses and investors. However, during the latter part of the year where the US dollar was increasing its value over other currencies, the resulting value returns for foreign investments were significantly lower (i.e., Japan, Mexico, etc.).  Not to hold back yet, uncertainty is still looming on how Donald Trump would enact his policies and how they would affect the global market economy as a whole. Trump assuming presidency means giving up control of his business interests to his sons in order to avoid conflict.

On the other hand, global interest rates are pushed to sustain market volatility. Nonetheless, the World Bank forecasts a 2.7% increase in global economic growth for the year 2017 compared to 2.3% last year. The lingering factors of volatility and uncertainty could factor in on how future US policies and restrictions could affect the global trade. The EU and other major economic players are all implementing economic stimulus to improve trade and economic activity. Small businesses are also eyeing an improvement, as economic growth inclusivity became a driving force. It means that these businesses would benefit from more movement in the trade and capital investment. It would help the group improve and provide a significant impact on the overall economic growth.

For the Organization for Economic Co-operation and Development (OECD), 3.3% would be the global economic growth for the year 2017 as compared to 2.9% of last year. The factors resulting in this predicted positive forecast would be an optimistic US economy and developed markets, which would improve economic activities and expected earnings. China is predicted to fall short on growth by 0.3% from 6.7% last year. The Europe area could be a different issue, as different parties would aim at targeting immigration and leaving the euro currency.

The US Dollar Trade-Off

Currently, the US dollar is enjoying great valuation due to rising interest rates, which is the highest among foreign economies. This means that higher interest rates could result in higher inflation rates. In this regard, the importing industry benefits from a higher value of the dollar due to lower cost. This low cost would simultaneously result in reducing inflation and striking lower prices in commodities. The downside would be for US-based companies with foreign investments, as their dollar earnings would be significantly lower. An example is the Yuan in China. The continuous rise in US dollar value would not be able to aid in any recovery for foreign international investment, but if the value keeps within the reasonable rate and the countries could cope with improving the stimulus, then a pay-off could be seen.

Market Recap

Dow Jones and S&P 500 slightly went down with 19,963.80 (-0.4%) and 2,276.98 (-0.1%), respectively. NASDAQ and Russell 2000 improved with 5,521.06 (+1.0%) and 1,367.15 (+0.4%), respectively. NASDAQ benefitted from positive trading on the technology sector.

Nikkei 225 slightly improved with 19,287.28 (+0.80%) and FTSE 100 with 7,337.81 (+0.62%).

The EUR/USD exchange rate closed at 1.0645, a 0.0033 change from last week.

Oil closed at $52.50 per barrel (-2.8%) while gold is at 1,197.30 down (-0.21%) compared to last week.

 

As always, stay diversified and keep up with tracking your long-term goals. As more reports are being released this Q4, uncertainty and volatility would be at play for every investment decision.


Weekly Market Review 11.1.2017

The January 3 to January 7, 2017 trading comes to a higher close after the dismal figures last week. Dow Jones is still on a hold up to reach the 20K mark. Federal Reserve is still evaluating the forthcoming reports, performance, and sustainability–whether the economy could pursue a three percent-interest hike for the year in short terms. US December reports fuel the positive prediction and sentimentality over the US economy. US payroll reports prove to hold up and improve over time, where an annual rise in wages is expected and factored in. A staggering 17.55 million vehicles, including light trucks, were sold in the year 2016, compared to 17.48 million last 2015.

On the global market news, the overall global market performance ended on few highs and gains. The highlight went to China where financial resources were continuously outflowing. This led to the Chinese government optioning an 80% increase in deposit rates for the country’s offshore deposit rates. The said overnight move is not enough to maintain a market rally where it just goes back in until Friday. That is why more capital controls are implemented on countries where foreign currencies owned by state-owned businesses are encouraged to sell The move is all for the stabilization of the currency while awaiting the effect of Donald Trump’s inauguration on January 20.

To continue the global scale of market performance with regards to growth, manufacturing and capital-related activities have contributed to positive results by year-end. The US continues its positive streak as to manufacturing reports, resulting in measurable growth, which is 54.7, compared to 53.2 last month. UK’s Brexit for this year does not at all affect its PMI, which still manages to post a 56.1 figure, a lead in comparison to the last 2 ½ years.

On other news worth noting, the US retailing industry suffered during the holidays, with more consumers relying on internet-shopping. This led to most Macy’s and Sear’s square-footage decreasing, as more stores are closing and owned brands are being sold. For instance, Craftsman, Sears’ own brand, was sold for $900 million to Stanley Black & Decker.

Stock Market Closing Week

Dow Jones closed at 19,963.80, up by 1%, while NASDAQ is at 5,521.06, up by 2.6%. The same goes for S&P and Russell 2000, which followed suit, posting a 2,276.98, +1.7%, and 1,367.15, +0.7%, respectively. The gain is attributed to positive sentiments from various US reports and the anticipation of Trump’s economy-focused presidency. Nikkei 225 still struggles with a close of 19,454.33, down by 0.34%, while FTSE 100 gained. with a close of 7,210.05; +0.20%.

The EUR/USD ended with 1.0533; -(0.0074) while the USD/Yen slightly recovered to 116.99; +1.64.

Oil closed at 53.70, down by 0.11%; the same as gold, which posted 56.75, down by 0.71%.

What’s next for the entire 2017?

For an investor, always know your long-term goals, as short- term events would either disrupt your plans or they can create more opportunities and lead to better decisions. The risk that comes with it should be within the accepted limit and the expected loss during any negative volatility. Always talk to the financial advisors, as they are the right personnel to give sound advice, aside from an investor’s own preference and risk appetite. Even stock investment and other financial market instrument investment is a passive investment. Be sure to check its status and continuing ability to provide the necessary goals that are meant to be achieved.