Market Forecast 24.1.2017

The closing prices for the US stocks during the last trading week is followed by a big week for US history as Donald Trump was formally inaugurated as the 45th President of the country. His Presidency would start with a lot of debacles in the global market as many affected parties would be monitoring the implementation of his promised policies. These include healthcare topics, letting go of Obamacare, and the continuance of US ties with Mexico, Russia and China. Reports would be published this coming week on the ever volatile market positions of most global economies.

Here’s an overview of what will come during this trading week.

Europe Reports

UK’s Gross Domestic Product data would be released on Thursday where the Q4 growth is expected to be at a 0.5% level. This forecast is less than what transpired during Q3. UK is still weighing in the deal with the turnout of the Brexit vote, which would materialize this coming March of 2017. As for the country’s economic reading, a good figure could be deduced, with a 0.6% expansion growth rate.

Germany’s IFO business climate figure is forecasted to further take a hike, up to 111.3 from 111.0.  The country is not that affected by any downside caused by Brexit, as this IFO figure suggests a strong economic position and growth from the past quarter. Even the US upcoming policies would not advertently put a stop to the country’s economic movement. Despite Germany’s resilience, 2017 would not be a great year for the country’s growth where it is expected to be slower as compared to 2016. The report would be released on Wednesday.

Mario Draghi, President of European Central Bank, would be giving a speech in Torino this coming Sunday. After his announcement of keeping the current financial policies, the political sentiment among parties would surely bring a lot of chatter. However, the President hopes that such tone in policies could be backed up by improving economic reports among its territories, like the positive figures from Germany.

US Reports

US Q4 gross domestic product date is forecasted at 2.1%. The report to be released this Friday signifies that the US will be holding fast economic growth two years from now. The third quarter is the starting point for the economic growth, which would directly be co-related to the election campaign. This in turn, amped up the country’s spending. Sentiments are also flying as to what the elected President could still do for the US economy.

Unemployment claims to be released Thursday is still below the 300,000 mark, continuing the record. It is expected to post a 247,000 figure this week. The data shows that the US economy is providing a strong labor market in the country, which, in the current President’s term, could still be improved. This is due to more focused spending, which could create more jobs.

Durable goods report to be released Friday is expected to project a 2.7% increase, with the core orders showing a 0.5% hike.

Trump’s presidency is acting like a great future with an unnerving volatility at the same time. His policies though, should be taken into serious consideration, so as to avoid any misreading of other global markets.

Other Reports

Asian economies are still mixed up, due to a volatile market and the negative impact of Trump’s policies on the Asian market. Bank of Japan is still pushing policies to put a halt on yen’s appreciation over the US dollar. On the other hand, China is putting action over the country’s debt and idle-moving finance in its banking sector. Other Asian markets are struggling to provide monetary policies to improve economic growth and stability.

Others

Brazil’s Judge, helming the corruption-scandal probe, died in a plane crash. Judge Lava Jato is currently investigating Petrobras, a state-owned company. Many believe that the accident would not halt the investigation’s progress.

Argentina is seeing a strong demand after the announcement of a $7 billion-bond deal in two parts. The said bond selling would have the country’s credit rating revisited due to the improved fiscal policy, adding to the fact of the country’s President Mauricio Macri’s popularity.

Market Recap

Dow Jones and S&P 500 fell again 19,827.25 (-0.29%) and 2,271.31 (-0.15%), respectively. Nasdaq and Russell 2000 suffered the same with 5,555.33 (-0.34%) and 1,351.85 (-1.47%), respectively.

Nikkei 225 tumbles again with 19,137.91 (-0.80%) and FTSE 100 with 7,198.44 (-0.14%).

The EUR/USD exchange rate closed at 1.0718 with a +0.16% change from last week.

Oil closed at $52.42 per barrel (-2.4%) while gold is at 1,215.00 down (+0.84%), compared to last week.

As always, stay diversified and keep track of the long term goals. Trump’s Presidency has a lot to offer on the global market, so stay focused and always be alert.