Tag Archives: Outlook

Market outlook 2016: what to expect for the next year

December is time to analyse the results of our investments and look what may happen in the next year. What are the expectations, forecasts and outlooks for 2016?

Macroeconomics

Last IMF projections about the GDP assumed that global economy would grow more than in 2015. India, ex – Soviet Republics (except Russia), Mexico and the developed countries will head this positive evolution. China will grow, but at a lower pace. The worst results are for Brazil and Russia, where there will be a negative growth.

Central banks

Next week Fed meeting will decide about the possible rate hike after 10 years and some think that the US central bank have reasons to do it, as growth and employment are strong in the first economy. However, a rate hike could have negative effects for the dollar, as it would strengthen against the euro (possibly till the parity) and exports would be more expensive. What is given for sure is that the ECB and the BoJ will remain their dovish position due to the weakness of the recovery in their areas.

Stock markets

News are not specially good for US stocks, as several experts agree in a low growth or even return decrease in the S&P in 2016. On the other side, European stocks would outperform American ones, although analysts warn about the effects of a weak economic growth in 2016.

Bonds and commodities

Oil will still remain weak or even cheaper, if we take into account some forecasts. OPEC countries do not cut their production and US inventories are at the highest level. The downward trend is also sure for the rest of commodities, as Chinese lower growth will condition this markets, because the Asian giant will demand less.

What the bonds refer, there will be not much changes, as central banks will still maintain its current policy, apart from the possible Fed exception, whose possible rate hike will not have an enormous effect in the yields.

That’s the general market consensus. Of course, life is always open and there can be surprises that can move more positive or negative: the next US president election, the evolution of Daesh and the Syrian war or any outrageous predictions that Saxo Bank typically publish at the end of the year… hopefully, none of them happen.

World global trends: markets in April

The main point to take into account in the market evolution in April has to do with the US. If we compare the figures with last month, the country trend changed from 40% to 25%. That was a drop! Such decrease is related to the economic outlook in the (still, but probably for short time) first world economy.

Global Trends april in T-Advisor

If we take a look at the chart in the American market, there is a downward line at the beginning of the month. March employment data published in those days warned investors about the recovery, because they were far from expectations.

US Global trends in april T-Advisor

These figures were confirmed by the GDP published at the end of April, the weakest in three years. Under these conditions, Fed Chairwoman Yellen and the FOMC were cautious in the statement on 30th. A rate increase has been delayed.

On the other side of the Atlantic, European markets are still weak, partly because of the contradictory statements from ECB chairman and its members. Although Mr. Draghi has insisted in the readiness for non-conventional measures, Germans are reluctant, despite the low inflation very far from the 2% bar.

Europe global trends in april T-Advisor

Emerging markets were also bearish. Asia suffered from the weakness of the American markets and also from some data from China. Last March, these exchanges benefit from the good expectations about the elections in Indonesia and India, but it must be waited for the results, as the process in India lasts a month and Indonesia publishes the results in some days, four weeks after the vote.

Asia global trends in april T-Advisor

Finally, the lowest point reached in February was the beginning of a recovery in LatAm markets. They registered the best position (29%) amongst all regions. The low prices in this area are moving positively the markets and some of these countries have the best positions in the T-Advisor global trends, as Argentina or Mexico.

LatAm global trends in april T-Advisor

Bullish mood in stock markets for 2014

Bullish markets: Some details about outlook 2014 by T-Advisor

After a quite good year in the financial markets, with good figures and profits, the question emerges: what about next year? Will it be better, worse or as good as 2013? Analysts are quite optimistic in their forecasts for 2014.

First of all, the mood is mainly bullish for next year. Market consensus agrees about double-digit returns in the stock exchanges. It is considered that US economy will grow, the monetary policy will remain expansive (despite the possible Fed tapering) and the interest rates will be still low.

The statistics help also this optimistic mood. A good year is followed by another upwards, so the studies. Since 1945, S&P 500 recorded an average 10% up after a year with 20% increase (in the most of the cases, not ever).

When we look at the different assets, equities are expected to provide the highest return, following a survey amongst investment professionals. 71% bet for them, against 4% for bonds and 10% for commodities. What products refer, ETF will also receive a push up, as another survey announced already in October. At least, 50% of investors planned to increase their ETF exposure in 2014 and 46% wanted to learn more about them from their advisors for next year.

However, there are also risks and fears for analysts. The uncertainty about the tapering (mainly, how deep it will be) is still a shadow for the investors. That is the concern for 68% of the CFA Institute members, for instance. The Fed meeting this week will possibly bring more light about this point. Political instability is also a problem. And it emerges a perception of financial bubble again, but with disagreement amongst the overvalued asset.

To sum up, there is a bullish spirit for 2014 in the air. After these long years of financial crisis, banking resize and unordinary monetary policies, the investors keep on the mood that has inspired 2013, with high returns and profits, and expect a good year in the stock markets.