Things to Know About Stock Market 2016
2015 was not an easy one for the economy. And yet, the disaster that everyone predicted did not happen. Despite the peak growth of the U.S. economy this year, the global economy slows down the pace due to the cooling of the EM, which provides more than 60% of global growth. In 2016 we expect the US economy slowdown and the stabilization of the EM, which will lead to the convergence of key economic metrics of both developed and developing countries. In the coming year a stabilization and improvement of all macroeconomic indicators is expected. Dynamics is supposed to mainly depend on the oil market.
Stock Market 2016
Here are top things to know about stock market 2016:
- The "Big Four" of the Central Banks (Fed, ECB, Bank of England and Bank of Japan) and their economies is going to stand still in a "liquidity trap", which limits inflation and potential growth rates in the US and the UK. It is still the era of the strong dollar, and, according to our estimates, it will last about 2-5 blocks.
- The Dollar and Euro will decline in 2016 to commodity currencies. To the Ruble particularly;
- Next year phase of weakening currencies will culminate in the "maturity" of the global monetary cycle. Also it is supposed to represent a gradual convergence of the economies of the USA and EAT and the impact of a moderate increase of dollar rates will become visible (We are waiting for the Fed's increase rate to extend by 3-4).
- In the first quarter of 2016 the Brent crude oil futures will have a tendency to remain in the range of 43-53 dollars per barrel, in case of external shocks absence. In the event that oil prices outside the range, they will seek to return to the specified corridor;
- Commodity assets in 2016 could grow or, at least, form a base for the beginning of growth;
- DM equity markets will continue to beat EM in early 2016, but in the middle of the year emerging markets will look stronger.
- Stocks of such commodity companies as ALCOA, Chevron, Exxon Mobil, PetroChina, Petrobras, Vale, as well as shares of Russian oil companies in the first quarter of 2016 could be an interesting investment object;
- The geopolitical tensions and the situation in Syria will promote growth of stock quotes of the companies that manufacture dual-use products. Forex Club expects price growth to Boeing, General Electric and United Technologies;
- IT sector securities will remain attractive in 2016. The Facebook, Google, Microsoft, Apple shares could show grow;
- Investors ' interest to “dividend” shares will remain. The greatest demand will enjoy McDonalds, Coca-Cola, IBM, Microsoft, General Electric and Philip Morris International;
- The growth of the Russian stock market could reach 30% -60% depending on external factors. The stock market of Ukraine and Kazakhstan in the first half of the year will be volatile. But they may show growth in the six months.
We hope that our review of things to know about stock market 2016 was useful and informative for you.