Rising inflation may force the fed to raise rates more aggressively, which will lead to the slowdown of the us economy in 2019, economists predict. In this regard, they advise investors before the end of the year to reconsider their positions in the debt market of the United States, because early next year, possible correction.
“The dollar rate and the US can grow as long as some of them will not fall”, – said the chief currency strategist at Bank John hardy. In his opinion, in the fourth quarter, the dollar will reach a local peak to a basket of major currencies, and then turn around and start to weaken because the market is already clear that “the fed’s policy has gone too far.”
“We expect that the market of tools with fixed yield will be volatile this quarter,” writes a specialist on the bonds in Saxo Bank Altea, Spinozzi.
After the correction at the beginning of 2019 in the U.S. market is likely to rebound, but investors should not see it as a buying opportunity. Financiers are advised to review their investments in the most risky assets and to fix a portion of the profits.
Policy first
“The debt market of the USA in the near future will remain volatile, including for a policy rate hike,” agrees head of investment strategies BCS Yuri Sorkin.
However, the overall destabilization of the U.S. market is to wait for other reasons, the chief investment strategist ITI Capital Iskander Lutsky. According to him, the main factor of influence on quotations will be the outcome of the elections in the U.S. Congress, which will take place on 6 November. “American elections have traditionally contributed to the increasing market volatility,” says the strategist.
Lutsky said that the American stock market is still overheated and it may well become a prerequisite for the correction ahead of the elections. “If the election victory will win the Republican party, the S&P 500 index will rebound and by the end of the year can rise to 3100 points, or 8% from current levels. But this correction is expected on the background of volatility”, – predicts analyst.
At least for the U.S. stock market and crush inflation risks, it will continue to stay in great shape until the end of the year, I am convinced, despite pessimistic forecasts, colleagues, CEO of IC “freedom Finance” Timur Turlov.
“Now most of the leading indicators while talking about continue and even accelerate economic growth in the US and inflationary pressure,” he commented.
According to the financier, negative on the us stock market will affect only the active policy of protectionism, which has the potential to slow down economic growth in the United States. However, these fears might be exaggerated. “There is reason to expect that the US market, by contrast, will give us a great Christmas rally, in dramatic reporting season,” concludes Turlov.
