Will The Fire Rooster Be The Market Booster

As the many antics of the inconsistent, sizzling and mischievous characteristics of the Red Monkey left significant tracks and marked 2016 with strong glitters and jitters, now new awakening is in force.

Along with the Chinese Lunar New Year, new expectations are rising. The urgency, energy and vibrancy of the desired changing environment will be set in motion with the Fire Rooster.

If there is something in your nature that do not understand or accept the Chinese zodiac, I would only  like to drag your attention to the signals of this New Year from another viewpoint and to implement some signs  into the tentative market forecasts.

The comfort provided by complacency and indifference is a past. The future will be fuelled by a certain ambition and assertiveness. 

And here is a slight glimpse of what is about to come along with the Fire Rooster.

A distinctive feature of the Rooster is not be quite and not to care about what is expected or desired. Do you find any resemblance with the new US President elect? Daring tweets, new Berlin wall, immigration ban. And meanwhile the Trumponomics is offering fiscal relaxation and protectionism, which is inflationary and is supposed to reinforce the US Dollar bulls. Yet it is too much and yet it is too soon to see how this will enact and how much time it will take to affect. One thing is sure – markets are at risk caused by the disappointment of Trump trade.

The conflicting elements of fire and Rooster’s self confidence and ambition could be clearly be read in Brexit drafts. How hard it will be and how Europe will handle it? Talks will not end soon, but talks are affecting the markets. Sterling will be extremely vulnerable and UK assets’ value will be marked down. 

Oil market balance is undetermined. The supply glut is still labelled by some unknowns. And markets are going to shift the mood into „Wait and see” mode. 

The Rooster is going to blaze with the characteristic of alarm clock and is going to brake the silence of uncertainties related to the banking sector. The optimisms towards the investible global banks is rising along with the outlook of higher interest rates. The economic growth is accelerating as policy gears are switching from monetary to fiscal measures.  

I have outlined just some fews, but within the geomagnetic field of importance. Of course some side effects such as plummeting of the Mexican peso and Turkish lira , Russia’s escaping the trend and China’s capital outflow shouldn’t be neglected.

In summary, the year of the Rooster will bring simultaneously optimism, movement, changes and turbulence on markets. And new opportunities on personal level.

Whatever you meet at this year unfold, I suggest you always to think about the present - how wide it is, how deep it is and how much might be yours to keep. Transform your fears into prudence, mistakes into intuition and desire into undertaking. Then the Rooster will be your booster!

2016 In Glitters And Jitters

2016 turned to be full of surprises. It was fascinating with ambitious, adventurous, sometimes irritable and sizzling characteristics. Stocks recovery from the worst-ever starts, Brexit, Trump, oil, central bankers intervention. I may say it was an extremely interesting year all along the way and here are the events that labelled 2016 and shaped the financial markets.

The brutal year start ever. During the first ten days of January Chinese stocks plummeted and caused deterioration on markets. The world was somehow hammered by fears about China’s economy turmoil and the weakening of Chinese Yuan. What actually happened with Shanghai Composite Index:

Of course stock markets tumbled world-wide, many companies suffered and experienced their worst start to a year. A kind of huge anxiety on markets. The shares of some companies marked huгe declines. Here they are:

What shivered the markets at the end of January was the slump of oil prices. Crude oil prices hit a remarkable low at $27.88 a barrel and provoked sell off in energy sector shares and bonds, high-yield debt and all considered as risky assets. 

The next jitter was served by the Bank of Japan, when at the end of January announced that will keep the negative interest rate policy. This mirrored in investors withdrawals and facing higher-yielding euro zone, UK and US dept.

The next and genuine shock for the markets was Brexit. The UK’s vote rocked global markets and something very bad happened. The Sterling dropped with 11% during the referendum day and $3 trillion was wiped out from the global stocks the next two days. The GBP/USD pair suffered most and marked a very very murky year. What actually happened with the Cable is clearly seen on this chart:

In the middle of the year some glitters shines over the markets. Throughout July and August S&P 500 set all time highs. The US economy growth is improving and is stable and boosted Wall Street. The uncertain political climate was fading away, the sun started to shine over the  global stocks and led their way to finish the year in the green.

In September the shares of Germany’s biggest bank dropped to lowest levels for decades after the US Justice Department proposed that the bank must pay $14 billion to settle mortgage-securities probes coming from the financial crisis. The domino effect was inevitable. Another European banks grasped the weak economy.

In November the focus was set on the US presidential elections. The most contentious race was about to be won by the Democratic candidate Hillary Clinton. Well it didn’t happen and markets hardly digested this shock, because what was expected speaks much: 

Well the shock was short lived and market participants welcomed the game changer and cheered the implementation of fiscal stimulus, taxes cuts and the rolling back on regulations for the US business.

Wall Street equities have moved to higher levels. Selling of bonds motored further after the Federal Reserve announced that will act more aggressive and will take actions for rate hike next year.

Further on markets faced the non-Opec producers agreement in late November.The global supply glut was an enormous pain, but finally we witnessed a solution. And in fact the cut in December contributed to the return of Opec and even boosted the oil prices.  

Well it seems that we're living in interesting time and I'm curious what next year is going to bring.