Why We Are Likely To See Sideways Movement In US Equities

2014 was a massive year for United States equities. The Dow Jones Industrial Average, S&P 500, and NASDAQ all smashed through barriers that many experts didn't expect to see broken for years to come. However, 2015 may not prove to be such a great year for the market; and we're starting to notice a change in momentum. Here are a few reasons that we're likely to see more sideways movement than growth this year…

Investors Are Waiting On Earnings…That Probably Aren't There

Monday was the second slowest day in the market throughout the year 2015 by volume. On Monday, only 4.5 billion shares exchanged hands; which is incredibly low. While no one can pinpoint 100% of the reason for the slow volume, most experts are pointing to the fact that investors are waiting on positive earnings reports to decide where to put their money.

There's one big problem with this. The bottom line is that earnings aren't expected to be “blow you out of the water” good this quarter. The reality is that the US Dollar is incredibly strong, causing declines in foreign trade. As a matter of fact, Johnson & Johnson released their latest report Monday; showing a 12.4% decline in international sales. Coupled with the fact that consumer spending is down here in the States, the reality is that in this round, we're not going to see much positive news.

Federal Reserve Interest Rate Hikes Are Coming

Another major topic in the investing world has been the fact that the Federal Reserve plans to increase its interest rates in the second half of 2015. This is major news for investors because the lower rates are lending a hand by offering easy money in the market. However, if you take those lower rates away, investors will have to focus on dialing down risk and figuring out which investments to keep and which to trash. So, we're starting to see less volume and more strategic purchases in the market as investors anticipate higher interest rates from the Federal Reserve.

2015's Economy Is Nothing Like 2014's

Another factor that has a heavy impact on the market is economic data. The reality is that investors feel more comfortable investing when economic conditions are good. However, this year's economic data isn't expected to be as spectacular as what we saw last year. As a matter of fact, we're already starting to see growth in US economic conditions slowing down. In March, the United States only added a little more than half of the jobs experts were expecting to see, consumer spending is at near zero growth, and some experts are already forecasting a 0% GDP growth rate for the first quarter of 2015. Sadly enough, these are only the major issues we're facing right now, there's more data that shows that economic growth will slow in 2015. While some experts are saying that we are still on track for the best year since 2005, based on the data I've been able to find, I'd have to disagree.

Final Thoughts

With so many issues plaguing the growth of the markets, I'm convinced that we're going to see quite a bit of flat movement this year; or at least far less growth than we saw last year. The reality is that a fast growing US dollar isn't a good thing. That coupled with the Fed's plan to increase interest rates, and the recent poor economic data we've seen; I just can't justify a prediction of massive growth. However, I'd love to know what you think we're going to see. Let me know in the comments below!