To what extent will volatility continue in to February? Market participants remain uncertain. Numerous indicators point to some level of sustained volatility including price fluctuations in oil, US dollar and other major currencies, macro-economic gauges, and the ever present political climate leading up to the presidential election in the US.
Traders and active investors have certainly had their share of excitement in the first month of the New Year. 2016 has certainly provided a tremendous opportunity to experience price action in a variety of indices and equity names. In addition to the more macro based volatility, participants are being treated to an interesting earnings season. Outside of the usual drama surrounding earnings, analysts have heard numerous mentions of how the strength of the US Dollar impacts global companies as they report their respective earnings. Though coming to light relatively recently by the main stream financial media, the implication of a strong dollar on domestic based companies has been discussed by the TradeXchange team in addition to other important analysts.
On the topic of currencies and global economic trends, traders have been dealt with unique scenarios including continued negative German Bund rates and negative rates out of Japan. To complicate matters, US based pundits have begun to discuss whether the Fed will continue rate hikes into the rest of 2016 or reassess the rate environment bearing in mind the new Chinese economic reality.
Traders and Investors will certainly need to keep current and steer clear of unnecessary noise in order to maintain some semblance of clarity in the US equity markets.
