The new year begins to question: in the last three months, will the stock market be directed to start a new quarry of a horrible 2019 or a bull market? In the future, in the face of a decisive forecast of the stock market in 2019, there are some tendencies.
Faced with this, financial markets are experiencing problems. In June, the S & P 500 index reached a 20% threshold for the bear market.
Some experts see a recession, but signs of slowing economic growth are piling up. The 10-year Treasury yield has been the lowest from April to April, although the Fed has tightened and programmed its quantitative reduction.
The financial sector is in a very high market, with more than 20% of the SPDR Financial ETF (XLF). The price of oil in the market is also very important, as a supply, with the economic downturn that concerns the economic slowdown. A large part of the stock market, FAANG stocks over the 2017-18 profit were thrown into trash. And the market has no new leadership. IBD 50 index of the most important growth stocks is about 30%.
So how do you judge the previous year? As always, smart investors will have their eyes open, with the behavior of the stock market at all times. But there are seven factors that stand out for the forecast of stock market 2019. How to play a role in the role of stocks.
Among these factors, two are highlighted due to forecasts and consequences: trade policy and interest rates. The trade war can suddenly spread in multiple industries and may result in emissions. Markets fear rate increases the rate of increase, making it an economic recession.
Here are a look at each of the seven factors, plus how the stock market investors prepare for whatever 2019.
1. Stock market volumes in 2019
In the 2018 trade, it underwent trade war, Treasury anxiety performance, European political spasms and other dangers. In the last few months of the year, investors have not passed. Since 2019, the market has to be the worst case since 2011. On December 20, 2007, Nasdaq ruined the depth of the beef market.
Volatility emphasized a large part of the 2018 market. Based on the daily price prices, 2018 doubled the volatility that 2018 pleased for 2017. In terms of price distribution below the average, and slightly above the average, following the market history of 1962. The last three months have been above the average, in traditional markets.
IBD's current vision is "a direct market" to help investors keep their money in the best possible way. Stock options are scarce. Stocks with little value are creating sound bases and floundered in the last few months. Investors must be ill and wait at the bottom.
The S & P 500 index was approximately 135% due to the fall of 2009, as it did in California's San Andres. When more time passes, we will be closer to one of the main agents. But because of the pressure on the tectonic plate panels, it is necessary to stop excessive speculation from time to time.
It also serves as a bear market or a large correction, eliminating excess filters. The rise in the price of profits goes down and the new waves of institutional purchasing reveal the next bull market. The main drops usually make up legs, and today the indices are the third retirement age.
While the stock market has been bad in recent years, there is no sign due to the supermarket market in 2008 and 2000. Mega breaks occur when extreme self-confidence is over. For example, marginal debts exceeded the levels that existed since 2000 before the 2007 market. Margin debt growth is hardly blip right now.
2. World stock exchanges. United States Stock Exchange Scheme for 2019
A large part of the securities market forecasts depend on the strength of US and foreign economies in 2019. The stock market in the United States as late as 2018 has still surpassed the world's leading indexes. And the same would happen in 2019.
S & P 500 approx. 7% to 2018, Shanghai Composite has a 25% discount, 33% Shenzhen, France CAC 40% 13, Germany DAX 20%, London FTSE 100% 15 and Japan Nikkei 12%. Brazil and India, They are 12% and 5%.
The US economy's performance was much stronger and profits from corporate profits were much higher than those in other developed countries, even after the United States's tax cut was lifted, says Kelly Bogdanova, vice president and RBC analyst portfolio.
"It is very clear that European and Asian economic challenges are still visible, including China, and China is a very important factor," said Bogdanova. European political issues are compound issues for 2019 forecasts.
There are other central bank factors to see. While the United States and Canada tightened, the European and Japanese monetary policies are very good.
IHS Markitek calculates 1.5% growth in the eurozone in 2019, down from 1.9% to 2018.
U.S. The economy is expected to continue to grow, albeit slowly. RBC will have an increase of 5.2% in the following year, according to other forecasts. US GDP growth stands at 2.9% this year, from 2005 to BMO Capital Markets by 2019 estimates.
In fact, the U.S. economic expansion continues to be the longest record in the following summer. In the Blue Chip survey, professional predictions put the United States's probability of recession to 24% over the next few years, the BMO said. The possibility of lower recession, the less market will be in that country.
3. Trump Fares and the Chinese Trade War
U.S. – China's trade conflict is under pressure in the global economy and the stock market itself, adding RBC Bogdanova. The company affects the decision making of capital, and uncertainty is generally growing for executives.
The Chinese commerce threatens the war of commerce, Bogdanova says. But Beijing has levers that can be used to boost its economy and hopes it will travel to China in 2019.
For now, the 90-day trading war in the United States and China are negotiating to become the center of the trump administration.
Unlike corporate profits and monetary policies, international commerce demands diplomacy. That is why it is risky to evaluate when evaluating forecasts for the 2019 stock market.
"We believe China's trade warfare could have direct impact on S & P 500," JPMorgan warned in 2019 forecasts, taking into account other expectations. Escalation can lead to indirect costs, based on Chinese revenge and commerce confidence and the global economy.
A strong dollar has helped the United States's business and consumer support for the impact of tariffs, says BMO Capital Markets Senior Economist Sal Guatié. The "tariff toll" of GDP can be reduced to 0.4%. "With global demand declining, 8 percent of the commodity dollar rose to 16-year-high this year, it will expand the United States trade deficits for another decade by a growth of 2019 (0.5 percentage points).
4. Fed Rate Hike Outlook
How the interest rate of the Federal Reserve is managed by the policy makers is the 2019 question mark for the market. Fed raised the interest rate four times in 2018. At 19, the politician raised another two fed rates in 2019. To announce the rise of three rates. But Wall Street waited a bit faster, and the stocks plunged.
However, the market seems skeptical that this constraint will continue. 10-year treasury is getting less, and Cboe's FedWatch trader shows that the 2019 rate does not increase.
Unemployment low recognition and other fluctuations indicators have justified the Fed to raise the cost of loans. Increasing the rates of profit and profit margins.
Fed is perhaps more worrying than the partial investment of the Treasury yield curve, something that is a good record for predicting recessions.
The difference between profitability for 2 year and 10 year treasury has been reduced to 13 points. Once a 10 year profitability is below one year old, it is historically a recession.
While not yet in progress, at the beginning of December, the income from 3 to 5 years of the Treasury and the negative results between 2 and 5 years were opened. Last occurred in July 2007. Four months later, the stock market arrived and a great recession began.
However, the investments made at the end of the Treasury performance curve are not a major forecast of delay, says LPL Financial Research.
A better indicator is the investment in Finance from the 1st to the 10th of January. The San Francisco-based Fed research has been announcing nine recessions for 60 years.
Keep in mind that signs have been large samples.
"Many people believe that reverse performance reversals are not always sound alarms," LPL Research Senior Market Strategic Ryan Detrick said on December 5. "In fact, looking at the last five recessions, S & P 500 was not the peak more than 19 months on average after the reverse of the performance curves."
In the last two tension cycles, however, Fed went too far, bringing recessions between 2000 and 2008.
"The performance curve is believed by Fed's work to do with inflation," said Christopher Hyzy, chief of investment at Merrill Lynch. "When was the performance curve wrong?"
5. Small currencies and market forecasts for 2019
Small-cap stock can be an important global fuel market. But at the end of 2018, Wall Street's fall was brought. Will they keep dragging?
In 2019, retail growth has some uncertainty for companies. Growth caps are long, because they are small values, says Scott Hood, First Wilshire Securities Managing Director, specializing in investment in Los Angeles-based small and medium-sized businesses.
"Russell 2000 growth rate Russell 2000 is currently the highest value-for-money valuation value since 2003," said Hood. Russell 2000 Growth is a median value of 4.5 vs. 1.8, the Russell 2000 Value Index.
"It has been an overwhelming excitement of tremendous growth. At the same time, the great Bitcoin, cannabis and unicorn searches were on the market," said the IBD.
The photo of profit for small caps is not so pink. First Wilshire estimates that 37% of Russell 2000 has negative results. Russell 2000 is 39% of the growth index.
All 2019 factors must be a stock picker market in small caps, so investors can choose their stocks carefully.
6. Growth of 2019 profits
Profits are catalysts for driving stock prices higher. S & P 500 accelerated its profit growth in 2018, largely due to Trump tax cuts.
But how do they gain profit in the forecast of the 2019 stock market? Comparisons will be tougher. In addition, strong third quarter earners have reported that Q4 and 2019 estimates have been significantly reduced.
FactSet's 2018 profit calculation will increase by 20.3%, and the best growth would be from 2010. The pre-calculated 8.9% increase would be the highest since 2011.
For the year 2019, the FactSet calculations had S & P 500 profit growth, with only 7.9%, with growth of 5.3%. Narrow labor market, raw materials rise and higher financing costs U.S. The company can tighten it, but we will still see how much it will be. The strong consumer in the United States should be able to absorb higher prices if companies try to overcome costs.
Growth in corporate profits probably reached a peak in 2018, David Bianco, US shareholder chief and DWS chief official investment, said on February 26 release. "This holiday, especially due to special effects, such as tax cuts, dollar repatriation and oil price rises, is not surprising that the party can not move forward," he said.
7. IPO Calendar for 2019
Initial public tenders can incorporate hot stock for investors and increase the market. And some of the leading brands in 2019 are expected to attract initial public offers and capital.
"After years of IPO rumors, Uber, Lyft and some other unicorns are a huge storage firmly suggesting plans to complete the biggest suggestion ever," the Renaissance Capital's annual review gushes. A specialized IPO stock company, Uber IPO can increase more than 13 million dollars and Lyft IPO over $ 5 million.
Other large IPOs are in the pipeline, the social platform of Pinterest, the collaboration software company Slack, the exercise bicycle Peloton Interactive and the free stock-trading application Robinhood. In 2018, technology and biotechnology companies dominate the IPO 2019 pipeline.
Those coming from IPOs can easily reach $ 47 billion in 2018, despite the potential decline in business volume, says Renaissance Capital. The stock market risk posed a number of IPOS 2019, divided into 125 and 200 companies, this year in 190.
IPO markets in 2018 had a 19% increase in IPOs, with an increase of 32% in advances. But in general, the performance of IPO stock was a bad year. As of the 13th of December, the IPO's Renaissance Index fell 10.8% year-on-year and had a 1% drop in S & P 500. The average total return for the BFL for 2018 is -10.5%, 14.3% and 13.2% in the previous two years.
What would happen to Investors now?
Obviously, the stock market needs more than a few blocked blockers to recover the track. The safest signal will not be generated in the IPO market or in Washington, but rather the stock market itself.
Investors need to see the most important members of the partners in their daily routine, which sectors are recovering and have good stocks. It also points to the market sign as its tops, on the bottom and it's possible that all news is negative. Read The Big Picture and Stock Market The current pillar is close.
Keep stock with good sales and sales growth, which are better than the global stock market. These values can be primary leaders in the next progress and profits.
As of the end of 2018, some leading software may have good investments. Atlassian (TEAM) is one of the most attractive bases. Five9 (FIVN) is mainly traded over a 50-day average mobile phone.
In finance, PayPal (PYPL) has less than 75 companies. In the consumer's space, Planet Fitness (PLNT) the last drop of 17% fell. And health care, sleep apnea treatment maker ResMed (RMD) is changing the decent cup of the handle.
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