Will Emerging Economies Outperform Developed Economies in 2017?
Emerging markets and developing economies are expected to grow 4.5% and 4.8% in 2017 and 2018, respectively, according to the IMF update.
The world markets are poised to grow at a moderate pace of 3.4% and 3.6% in 2017 and 2018, respectively.
European stocks are expected to rise in 2017, but you need to be cautious of unexpected political outcomes in 2017.
Global economic activity is expected to pick up in 2017 after a lackluster 2016. It’s expected to be driven by economic activity in the United States.
The rising interest rate is expected to boost the economy in the long run, but it could severely impact sectors like real estate.
The financial sector is to poised for a better performance following the Fed’s March 15 interest rate hike and higher interest rate expectations for 2017.
The US dollar (UUP) (UDN) seemed to show mixed response to the Fed’s rate hike on March 15, as prices have reflected a downtrend so far in 2017.
One of the most important outcomes of the Fed’s interest rate hike involves the bond market.
US stocks rose slightly on March 15, the day of the Fed’s latest interest rate hike, with technology stocks leading the market after the announcement.
The volatility index is surprisingly low amid the uncertain political climate and rising interest rates.
Investors seem to be shifting from actively managed funds to passive funds in order to get higher returns.
Index funds have recently gained popularity since actively managed funds haven’t been able to capture investors’ return expectations.
In a March 3, 2017, Wall Street Week interview, Paul Schatz of Heritage Capital said he believes the Dow will reach 23,000 by Labor Day 2017.
Gold and oil are good hedges against inflation. While gold usually outperforms, if inflation rates rise along with interest rates, it might gain as much.
An improving economy suggests that “good inflation” is here to stay. However, the Fed has to ensure that the economy doesn’t overheat.
Commodities are a good hedge against inflation. Most commodities–except precious metals–including oil and food produce are a source of inflation.
As oil prices bottomed out in early 2016, inflation started to take off. Headline inflation was at 2.5% in January—near a five-year high.
Gold prices traded in a narrow range on March 15, 2017, after the Fed’s rate hike decision. On March 16, 2017, gold is moving in a positive direction.
After showing a huge fall in performance, crude oil prices recovered on March 15. Crude oil prices rose nearly 1.3% on the same day as the Fed’s decision.
On March 15, 2017, after the Fed announced the rate hike, the US Dollar Index experienced a sharp fall. It fell nearly 1% on the same day.