January is always packed with talks and seminars on how the year will turn out to be... and from one such talk, I compiled the list of "R"s that can affect the investment markets this year.
First R- Reflate the US market. US is facing deflation and the challenges faced by the economy and the measures taken to reduce the Deflation could impact the world market.
Second R- Rebalance Asia. While US is facing deflation, Asia is facing high inflation. The inflationary pressures are huge and that could have a negative effect on the market.
Third R- Resolve the Eurozone Debt Crisis. PIIGS- Portugal, Ireland, Italy, Greece and Spain were in serious debt crisis in 2010. How they manage it this year will have an impact on the markets.
Fourth R- Remember S&P 500. Historically, if the first 5 days of S&P trading is up, S&P ends up high end of the year. This has turned out to be true for 37 time of the last 41 years.
Fifth R- Rally in US markets in the 3rd year of the US presidential term. Again, statistics shows that the 3rd year of the US presidential term has always had a market rally and on a average the markets have risen more than 10.5%. This statistic is particular true especially in the first term of a new president.
Sixth R- Year of the Rabbit. CLSA does forecast every year on how the Chinese year will be. To read the full review please go to the link below. These are for Hong Kong Market. Overall, their prediction is that the Hong Kong Market will do a bunny leap this year.
https://www.clsa.com/index.php
Last and Seventh R- Reality. The speaker tweaked the words of Forrest Gump- My Mama said, market is like a bag of chocolate. You never know what you will get.
