Wall Street Analysts Predict Tough Year Ahead for the Market
2018 was considered to be one of the best years for the stock market because of the record that has been broken. The longest bull market in history happened last year and it was all too good to be true.
Even United States President Donald Trump posted a tweet about it and it would seem as if it is all going well, until the end of the find quarter hits and some experts believe that the bear market is fast approaching.
Some investors are already pulling out and trying their luck with the gold rising, but there are still a lot of investors who are optimistic for this year to become another remarkable year despite how it all ended last year.
One good sign has got to be how the economy continues to be strong despite the little bumps along the way. Experts believe that one big cause why it has been a bumpy ride for the stocks is because of what is currently happening with the trade wars between China and the United States.
At first, it hasn’t been really bothering the market, but as time pass by more and more companies are getting affected, even some of the biggest ones such as the automaker Tesla, as well as one of the most successful tech companies in the world, Apple. Which is why experts have officially reached what kind of risks many investors may face this year.
Slowing Down on Growth
According to some Wall Street analysts, they are not expecting earns to grow as much or as fast as it did last year. It is a fact that the stock market takes data points seriously, but corporate earnings are still way more significant, since every single time a company grows, their stock goes with it upwards as well.
Last year, it all started with the tax cuts that led to caffeine injection that surprised the corporate world, this led to the profits rising up to 23 percent and it would seem that its effect beginning to wear off because of how 2019 has started. It’s only a few weeks into the year and major stocks have fallen. This just proves that this year wouldn’t be as successful as it was last year when it comes to the stock market.
With the economy rising all throughout the year last year, the dollar managed to keep its head up high. The United States Dollar Index even got to add about 5 percent on its profits on the country’s multinational companies.
This proves once more that every product that was made by American companies that are sold in every other country will be way more expensive. However, experts have witnessed how the dollar has stood on neutral since then, but it was better than having it crashed.
Global Economy Struggle
Experts believe that recession is not around the corner especially with how things are doing with the American economy at the moment despite some struggles as the year 2018 ended. However, investors continue to wonder why exactly did the stocks fall so hard in the past couple of weeks.
The Federal Reserve is convinced that because of this, the economic expansion for this year will slow down up to 2.3 percent despite how the tax cuts and low unemployment rate had a boost. The United States is not alone though, many market analysts believe that the trade wars has indeed affected not the just the US, but also the Chinese market. The Chinese economy has been going up for a few years now and it hasn’t slowed down until now, they even consider 2018 as one of their weakest economic year since 1990.
It was also last year that the Brexit deal took its peak, and its effect on the economy of Great Britain and the rest of the European Union will be seen this year. This has yet investors from pulling out with the fear of the global economic slowdown.
Most of them are worried how the Federal Reserve will continue to raise its interest rates despite how slow the American economy has been going. However, some market analysts said that inflation is not something they have to worry about for now, since the central bank still has the power to slow things down if necessary.
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