Stock Markets 2019

After a rough 2018 on the stock markets, a question our readers often ask is: What will happen in 2019. The markets went down hard during the 3rd quarter of 2018, most notably during the week leading the Christmas. Since then, the various stock market indexes recovered quite nicely, most notably between mid-January and the end of February.

Let’s take a look at where we are heading.

The 2018 Drop

Investors that have been following the markets during the last few years knew that something was brewing. Since the summer of 2017, market commentators were saying out loud that the market was reaching all-time records that were not justified. Some said that after a bull market that almost reached 10 years, the markets HAD to drop.

Two particular items fuelled the drop: The lower than expected revenue growth of 2 Tech stocks (Facebook, Apple), and the rise of the interest rate by the Fed. If you add in the commercial tension between the USA and China, and the rough negotiations between the USA, Canada, and Mexico during the replacement of NAFTA, we ended up with the perfect storm for a drop of the stocks.

Here are some thoughts:

1. The interest rate must be carefully monitored. It obviously has an impact on the valuation of companies, and it may be eventually lead some investors to keep money on the sidelines or to invest on bonds

2. The commercial tensions between the USA, Canada, and Mexico are now behind us. There are some issues to be resolved, however, we believe that we will not see any real impact on North American trade

3. Negotiations between the USA and China are still on-going. This is an item we should monitor. However, we should see an agreement in the following months.

4. Tech Stocks: The darlings of the bull markets have taken a step back. However, the reaction of the overall markets gave too much value to the slowdown of both Apple and Facebook.

5. Market Commentators: They contributed to the fear factor, and eventually fuelled the desire of investors to pull their money out of the stock markets.

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Investors should be cautious, and carefully monitor the stocks on which they invest. We believe that StockInvesting360’s investing strategy will serve investors well as we enter uncharted ...

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