The Syriza party has said it wants Greece to stay in the Eurozone. But disobeying its regulators could threaten Greece’s position within it.
Greece is seeking a bailout extension, but this will only be made possible if it agrees to the troika’s conditions—mandatory economic reforms.
The outlook for global equities continues to look better than investments in cash and bonds. However, it’s important to know what could go wrong in 2015.
You can safely expect volatility to be one of the characteristic features of the European markets in the new year.
It’s indeed déjà vu as a fresh round of worry over Greek political instability engulfs the Eurozone (EZU).
The Russian rate hike is a desperate move to stabilize the country’s financial system. Tight liquidity measures would likely squeeze Russian corporates.
In addition to the expected shift in the monetary regime, the rise in volatility is also being driven by more unease from overseas.
The coming reduced accommodative monetary policy, along with rising geopolitical tensions, is likely to spur volatility in 2015.
The turmoil in high yield bond markets has left more than 18% of junk bond issuers at distressed levels. Investors should avoid the scary junk bond segment.
The fracking revolution and the plunge in prices have rendered the Oil Peak premise false. So alternative fuel companies are being hurt by cheaper oil.
According to estimates by Barclays, the industry could save up to the tune of $10 billion in fuel costs, making airlines lower oil price winners.
A rising dollar has and will continue to put downward pressure on oil prices, causing trouble for the energy sector (XLE).
The US shale boom, increased production elsewhere, as well as OPEC’s decision to maintain output are reasons for the current excess oil supply.
With China in a less oil-intensive stage of development, the demand for oil could stay low for a while.
The drop in oil prices is affecting the global equity markets (QWLD). The S&P 500 (SPY) also declined by 3.5%, the worst weekly decline in two years.
The immediate impact of Greece’s political crisis is evident in the capital markets, which have become jittery since Antonis Samaras called for snap presidential elections.
Greece is the Eurozone’s most indebted country, with a 175.1% debt-to-GDP ratio. In the world, it’s second only to Japan, with a 227.2% debt-to-GDP ratio.
The continuance of the New Democracy party’s ruling status is largely dependent on the snap election results, scheduled to be announced on December 29.
Although the GDP growth in the emerging markets is much more than the average GDP growth of the world (QWLD), emerging markets involve risks.
A rise in geopolitical tensions could cause higher market volatility. Today’s low volatility suggests that the market hasn’t factored in the possibility of geopolitical risks picking up.