American stock market news reports that in 2019, the sphere should show growth
In contrast to the predominantly negative news of the investment market, the news of the American stock market gives a rather positive outlook for 2019.
Experts expect it to be hot, with favorable factors on the one hand, but also with high risks on the other.
All the fault of the year 2018, which for the stock market turned out to be unstable. Due to political misunderstandings between the US and China, the oil and gas sector and IT companies suffered. The long wait for the market for further increases in the Fed rate provoked a sinking of the value of banks’ securities, and in December, the capitalization of the US market decreased significantly. Nevertheless, in the future, it is worth expecting the return of the stock market to its former positions, although it will most certainly be thrown in different directions.
Problem news of the American stock market
The main obstacle to the growth of quotations of companies from America is the general decline of the global financial economy. This is indicated by the business activity indexes of China, the USA and Europe.
It is also noted that in the last quarters of 2018, the American economy reached the maximum growth rates. The curve of the difference between the yields of long and short issues becomes flatter.
Europe’s GDP at the end of the third quarter of 2018 rose by 0.2%, compared with last year. However, there are no special reasons for joy, since this growth has been minimal since the second quarter of 2014. In addition, the German economy, traditionally one of the strongest in the Eurozone, slipped by the same 0.2 percent.
Similar problems are observed in other countries. For example, France suffers from the popular unrest caused by the reforms. The state risks to exceed the acceptable budget deficit of 3% of GDP, which is why the rating of President Emmanuel Macron melts before our eyes. In Italy, the authorities for a long time could not accept the budget for the next year, which caused concern in the EU.
Factors of possible growth of the American stock market
But there are reasons for making positive forecasts. Surprisingly, a downturn in the global economy may have a positive effect on stocks of American companies.
In September 2019, the US Federal Reserve planned to conduct three stages of raising the base interest rate, up to 3.25%. At the same time, the performance of futures on federal funds rates speak about the likelihood of only one increase, which is reflected in the yield of government bonds that sag in December, mainly long issues.
Experts also expect that in the new year the degree of trade wars will decrease. In early December 2018, the leaders of the United States and the People’s Republic of China agreed to postpone an increase in tariffs for accepting goods from China by $ 200 billion. During the first months of the 2019th, the authorities should finally settle the matter. It is reported that the President of America is actively interested in the conclusion the trade deal with China, but for this it is necessary for the state to make concessions on the part of reducing import duties on American cars by up to 15%. Now they make up 40%.
Considering the factors listed above, financial analysts count on the growth of the US stock market in 2019. It is possible that the S & P 500 index will put a new historical maximum – 950-3000 points.
