The slow but steady rise in stocks that has been ongoing since 2009 has come to a sudden end in the last few months. Volatility is back with a bang and a number of the world’s major stock indices are at increasing risk of slipping into bear market territory.
Thankfully, the Christmas holiday period has given traders around the globe a chance to catch their breath and think before the market roller coaster ride continues. However, there’s no doubt that market players from Seoul to San Francisco have only one question on their mind – will the volatility continue into 2019.
Unfortunately, the most likely answer to that question is ‘probably’. While there aren’t yet many red lights flashing on the global economic dashboard, there is little doubt that some of the top performers in recent years are softening at least a little bit.
The Chinese economy for instance, looks like it won’t be able to repeat the astonishing growth rates that it has maintained for two decades. Across the west, various political crises from Trump and Brexit to the gilets jaunes movement in France are unnerving investors who are watching for the certainty that they depend on.
Spending And Wages Provide Hope
The good news is that some other key indicators are still looking good. Consumer spending, seemingly immune to almost any economic pressure that may arise, continues to be strong across many of the world’s largest economies. Furthermore, wages across the western world are finally starting to rise after many years where they stubbornly remained flat no matter how low the unemployment rate dropped.
Once a mood like this grips the markets, however, it’s often hard to shake it off. Barring some truly surprising economic indicators, it seems likely that the market roller coaster ride will continue over the coming months.
Like any frenzied period, however, there are likely to be several opportunities for bargain hunters to pick up some cheap stocks. The same goes for foreign exchange market traders, who will likely have the opportunity to make some great deals if they keep their eyes open.