Market Update: What Investors Need to Watch Amid Trade Problems?

  • Dec 14, 2018 AEDT
  • Team Kalkine
Market Update: What Investors Need to Watch Amid Trade Problems?

The settlement in the trade war between the US and China can revive the investors’ sentiments as the uncertainty in the battle has been impacting the investors’ minds. However, another factor which the market players need to watch in the decision of the Federal Reserve with respect to the interest rates. The Federal Reserve’s meeting this month is the crucial event which needs to be closely tracked by the market players. The market players might want to watch the Fed’s decision amid the concerns related to the trade wars. A rise in the interest rates might lead to further problems in the US economy as the trade worries are not completely over. However, the Federal Reserve needs to keep a check on the inflation also.

Therefore, it can be said that the meeting of the Fed this month is the crucial event which could impact the performance of the equity markets. The US and China are showing their efforts towards the settlement of the trade battle. The worries between these two economies need to end as soon as possible if seen from the point of view of market participants.

Worries of Weaker Economic Growth to Impact Oil Prices

The movement in the oil prices is another concern which is impacting the sentiments of the market participants. The momentum in the financial markets tends to impact oil prices as well, and a downward trend in the financial markets would, in turn, lead to the fall in oil prices. The oil prices are expected to be impacted by the worries about weaker economic growth. The unfavourable momentum in the global economic growth has the potential to disrupt the demand of oil which could pull the prices down even though the cuts in the production levels have been announced.

However, amidst the worries related to the downturn in the global economic growth, the market participants need not to completely ignore the move of the production cuts. It can be said that the oil prices have also remained quite uncertain and still the impact of the global macro factors would continue to impact the prices moving forward. Any positive news with respect to the trade wars would help the financial markets, and this could also support the oil prices.

Markets in Australia Ends in Red

The Australian markets have ended the session on the negative note. On December 14, 2018, S&P/ASX200 closed at 5602 which implies the fall of 59.6 points or 1.1%. Talking about the stocks which rose, Sigma Healthcare Limited (ASX: SIG) and Infigen Energy (ASX: IFN) closed the session by witnessing the rise of 43.21% and 11.765%, respectively. On the other hand, the stocks like Nine Entertainment Company Holdings Limited (ASX: NEC) and Domain Holdings Australia Limited (ASX: DHG) closed the session lower by falling 8.896% and 8.661%, respectively.

However, Fonterra Shareholders’ Fund (ASX: FSF) had made an announcement regarding the changes with respect to the management team. Read the full news here. Also, Flamingo AI Limited (ASX: FGO) had sealed a deal with Nationwide. Read the full news here.


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