Stock Market Crash 2016
What are the reasons and causes of Bear market in 2016?
Bear market is the descending phase of the movement of the stock market characterized by consistent updating of quotations lows. Bear market is often defined as a fall by at least 20% of the stock of the S&P 500 index. The problem is that at the time when experts take out a verdict that we really are in a bear market, the index has already lost 20% from its peak. Many of them were probably telling investors to buy on dips on the way down.
2016 may pass for an investor under the Bear sign: the biggest investment banks forecast a long-term decline in all segments of the stock market or, in other words kind of stock market crash 2016. So, JPMorgan Chase analysts for the first time in seven years, called upon the bidders to sell the shares even at a planned rally. And strategists from RBS advise their clients "to get rid of everything except of high quality bonds".
This year's bearish market risks continue to grow due to overall recession. It is making the long-term company investments not only little benefit, but also dangerous, according to banking analysts.
Back into depression or stock market crash 2016
According to Alan Ruskin, the Head of group of the developed countries ' currencies in the New York branch of Deutsche Bank, by the end of the current quarter, the Euro will drop to $1,05, and during 2016 falls below parity with the Dollar.
His confidence in selected "bear" line reinforced Monday published the data about dynamics of consumer prices in the Eurozone. They can probably push the European Central Bank (ECB) for further monetary policy easing, reports Bloomberg.
The consumer price index (CPI) in the Eurozone in February dropped by 0.2% in annual terms, after rising by 0.4% in the previous month, while economists on average had forecasted a zero change. Thus, deflation returned to the Eurozone for the first time since September last year, when the consumer price index fell 0.1%. It was the highest in intensity since February 2015.
We fear that the upcoming corporate reporting for the fourth quarter will not be able to provide confidence in the stock market - said Matejka.
The slowdown in the US manufacturing for the first time since 2008 has pushed profit margins, which were calculated by investment bank for companies in the fourth quarter, to the negative zone. The December ISM index in the industrial sector of the country, which was published last week, fell to 48.2% as against 48.6% in November. And this became the minimal level since the times of the Great Depression. So, can it be called stock market crash 2016? And the answer is clearly understandable.
Bearish market of 2008
The Governor of the Bank of France and member of the Executive Board of the ECB Villerua de Galo said in an interview with German newspaper Frankfurter Allgemeine Sonntagszeitung over the weekend that deflation is the main threat to the Eurozone economy during the bearish market year. Also, he added, that we all should take a lesson from 2008. It also raised expectations of European Central Bank stimulus programme at the March meeting.