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What will influence the stock markets in the coming days and weeks
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Loading...The stock market in US, continue with consolidation moving, and yet there us no factor to change this.
What will influence on sentiment in next days.
The first major factor, is the financial statements of companies whose corporate season begins today. The financial statements are the main factor determining the direction of the market for weeks. This will be the first quarter since Donald Trump was appointed as President of the United States, and it will testify about how to handle economy.
They also can be the spark that will ignite the markets as investors have become more cautious amid signs that many policies to promote growth promised by the new president may be delayed.
J.P.Morgan Chase & Co., Citigroup Inc. and Wells Fargo will be the first to report quarterly results. The financial sector will be under the spotlight since the change of the Federal Reserve to tighten monetary policy, and the first quarter results will be a critical test for the bank shares.
According to Jeffrey Saut, chief investment strategist at Raymond James, S&P500 traded at levels between 2,335 and 2,400 over the past two months mainly, because the market is "confused", and there is no clear indication that they will be increased or decreased. "The best strategy is to do nothing," he added.
Ian Winer thinks, that if tax reform is accomplished, the markets will go up.
On the other hand, if tax reform fails, there will be quite a reason to sell shares, taking into account the failure to replace Obamacare. NYSE Advance/Decline Line is rising even as the S&P500 declined. The increase of this indicator that tracks the number of rising stocks signaled a positive trend. The only times when the S&P500 declined and the A/D Line was increased was in April 2014 and April 2016. Both times they brought pretty good upward movements on the markets over the next few months.
The second major factor that will influence the market is Trump.
Wall street start to treat Donald Trump like "President chaos". If You looking for successful investment strategy in Trump rally, this is it: always expect, unexpected.
Missile strikes against Syria, the tensions with Russia, exchange remarks with North Korea, disarray in the White House political war in Congress: the outbreak of the crisis became a daily routine.
The markets traded so far expectations of policy Trump, namely lowering corporate taxes and increase spending on infrastructure and defense. This so-called Trump Trading ends and more studies show that the market is overbought and correction is possible. It is likely already have seen the end of strong upward movement.
European stocks fared better than the US and Japan. Technology stocks will continue to do well as they are the only sure way to ensure growth of the portfolio.
The real estate sector will improve as inflation and macro-economic indicators disappointed, reducing the prospects for higher interest rates.
The energy sector is "unsustainable" capital structure for oil prices.
If Emmanuel Macron won the French election, French stocks will perform significantly better than other European equities in the second quarter.
The third factor is the geopolitical tensions. The increase in geopolitical risks will also adversely affect the stock market. It is likely tensions to rise because it is welcome for the oil countries, namely it comes from Syria, Iran, Russia and others.
Rising oil prices after a rise in tension is likely to continue, which will support energy stocks, whose sector will offset declining consumer. Therefore we can not expect significant changes in the index.
Last but not least we may see profit taking aim with caution before Christian festivals around great day amid frequent terrorist attacks.
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