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.
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.
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.
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.