Big and small traders spend days and months trying to understand which way the markets will lean. There is also the matter of stock movements inside a particular day. This is done in order to beat the market and come out smelling of roses. As we begin the year 2019, what are the trends you should know about?
- Good Times Not Here Yet – Globally, India, and Brazil were the only two economies where the stock markets gained marginally. If you pick up any other index globally, they all dipped in 2018 – Shanghai Composite, Shenzen, CAC, DAX, FTSE, Nikkei and of course the US markets which had a rough year. This should have made the situation ripe for a turnaround in 2019. But the political situations worldwide do not provide that comfort. So you need to be prepared for another few months of bad weather.
- Political Upheavals – Talking of the political situation, the US trade faceoff with China is expected to claim the biggest victims this year. Internally too, US unemployment has touched record low levels last year. Europe has the messy affair of Brexit still unresolved. Elections in India are expected to rock the boat mid-year. That is why 2019 promises to be a year when the movement on the bourses would be dictated by political events more than economic ones.
- Banking Rates – It is an undisputed fact that the Fed rates announced in the US always have a trickle-down effect on economies the world over. And this impacts the stock markets as well. 2018 saw as many as four increases in the Fed interest rate. At least two hikes have been forecast for 2019, and there could be more.
- The Verdict on Small Caps – In most markets, small caps took a beating in 2018. In some markets, the meltdown began as early as 2017. This has resulted in several small caps coming down to much more realistic valuations. The values of small-cap stocks are expected to get resurrection finally in 2019. Investors have a keen eye out for small caps this year. You can expect some action in small caps in 2019.
- EPS – The earnings per share is one of the most popular indices used by serious investors. The third quarter saw many corporates announcing handsome results. This means that the outlook for Q4 would be toned down for most. And this would also spill over to the first half of the earnings forecasts. This dark forecast for earnings will have some downbeat effect on scrips and markets as well.
- IPO – Nothing energizes the markets more than initial public offerings. Because of the dates being pushed back in 2018, there are several notables lined up this year. Notable among them are the aggregators Uber and Lyft, with worldwide attention firmly focused. But there are some more interesting names expected. One of them is Pinterest, which has maintained its position among the top 5 social media platforms for several years now. Then there is slack which produces collab software, and Robinhood, which is a free stock trading app. This will also generate a lot of interest in social trading platforms like https://www.etoro.com.
With these six trends, the year 2019 promises to be an action-packed year. The basics of stock market investing will stay the same. Investors need to focus on the earnings and growth of sales revenue for sure. As soon as the downturn is corrected, and things begin to look up, these are the stocks which will shine. The market always gives out signals in advance that it has reached the very bottom. Those are the signals investors need to watch out for. Till the time the dip continues, it is a good idea to improve your positions on potential stocks.
Finally, what is a blog on stock market trends for the year without listing a few possible stars to watch out for? Every stock market watcher has his or her own favorites, and here I will list down mine for 2019. As I said, I would prefer those who are still on a downward trajectory. I would say that stocks like PayPal, ResMed, Five9, and even Planet Fitness are the ones to bet on. Their base is quite close, and 2019 would most likely see them zoom back up.