Analyzing the current market trends

The current market is so surrounded by drama that it would require a keen eye to analyze trends. Nevertheless, GTC is here to give you insights on the elements you need to consider this week and what trends these elements might give rise to.

Before we begin, let’s consider the events that are just around the corner and will heavily influence the market sentiments. First and foremost, coming up this week is The Jackson Hole Symposium; an annual event held in Wyoming is an occasion that gravely influences market movements. 

However, as investors await Powell’s Jackson Hole speech everyone is already aware of how in favor the Fed Reserve is, on continuing to hike up borrowing rates. This might ultimately lead to the dollar rising up. As the dollar keeps soaring everyone is up for grabs. If this continues the global market will suffer a dollar deficit

 

The Remaining of 2022
The Remaining of 2022 doesn’t promise us a rosy picture either, as indications of a recession begin to materialize. Several economists have warned this recession might be among the worst yet. Moreover, the energy crisis in Europe keeps aggravating especially since Nord 1 pipeline will be shut for another three days in August. Further yet the second half of this year which is already upon us promises to be the worst. 

Nevertheless, every event if analyzed correctly can be an opportunity. As we discussed in our previous blog How To Invest In A Recession Economy? For a smart analyst, even a recession can provide opportunities. The coming market bottom has the potential to create some good opportunities. 

September promises a bumpier ride ahead. In addition to Fed Reserve’s tight monetary policies, September is generally a difficult month for the stock market. Hence current predictions are the S&P 500, which might fall a further 10% after its current rebound. 

 

The Bearish Market
The U.S. dollar is still a popular choice for traders as a result of the market selloff across the globe, strengthened by continuous rate hikes. U.S. monetary policy can however eventually be loosened by using a blended strategy of a rapid balance sheet runoff and interest rate hikes. 

Moreover, S&P 500 upward turn after a long dip, might mislead investors of a broad selloff in September. 

 

What’s next?

Currently, the markets have shown Tech earnings, and crypto earnings to fall steep. While on the other hand energy earnings have peaked. This could be a result of several factors at play. However, investors beg the question whether on whether to sell, hold, or double down. The extremely volatile market at present urges us to favor staying invested.

Based on historic records of the ten worst days in history, the market usually performs above average afterward. Similarly, coming weeks and months can easily be studied based on historic records.

However, in scenarios like these, we at GTC always urge clients to use only one strategy, Diversification. Having a diversified portfolio helps balance out losses with gains. For example, the U.S dollar is usually inverse to gold, so if you have both investments and one falls sharply you’ll be able to pick up your losses with the gains made by the other asset.

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