27 Apr

Will the Market See a Correction in 2017?

WRITTEN BY Sarah Sands

Fidelity’s Jurrien Timmer in an interview with CNBC

In an interview with CNBC on Monday, April 24, 2017, Jurrien Timmer, the director of global macro at Fidelity Investments, shared his views on the markets, corporate earnings, and Europe (VGK) (IEV).

Will the Market See a Correction in 2017?

Jurrien Timmer on the equity market

After the first round of the France presidential election, the markets (SPY) (QQQ) showed some positive movements. Emmanuel Macron got 23.7% of the votes and Marine Le Pen got 21.7% of the votes. The second and final round of the election will be held on May 7, 2017. The first round of the election met market expectations. Read Inside the French Election: Will the First Round Winners Drive Sentiment? to learn more.

Jurrien Timmer said in the interview that the France election somehow met market expectations and that it’s driving the index performance. Since the beginning of April 2017, the market hasn’t seen much movement. He also said that there are some macro events that are impacting market performances both negatively and positively. There’s always a possibility that the market may show some correction, but in the long run, the market (VFINX) could give good returns.

He said, “There are always tail risks. There’s always a 1 in 3 chance that the market goes down 10 percent and a 1 in 5 chance the market goes down 20 percent, but yet over the long term the stock market goes up 10 percent a year about 70 percent of the time. There’s always a wall of worry to be climbed.” He added, “It’s nice to get this one [French election] out of the way.”

In 2016, various macroeconomic factors affected the S&P 500 Index (SPX-INDEX). China’s slowing manufacturing PMI (purchasing managers’ index), the United Kingdom’s Brexit decision, the US election, and the Federal Reserve’s interest rate hike were the prominent events that affected market movement during the year. The market showed a number of small corrections in 2016. However, the S&P 500 Index (SPY) returned nearly 11.6% in 2016.

In the next part of this series, we’ll analyze Timmer’s view on corporate earnings.

Latest articles

25 Jun

Gold Breaches $1,400: What’s the Next Stop?

WRITTEN BY Anuradha Garg

Gold is now trading close to a six-year high following the Fed’s dovish pivot at its June policy meeting. After being range-bound for the last five years, gold has finally broken out and its outlook is bullish.

Shares of the J.M. Smucker Company (SJM) are up 29.8% year-to-date as of June 24 and have outperformed the broader markets. The company's acquisition of Ainsworth Pet Nutrition and its focus on high-growth categories via divestitures have supported its stock so far this year.

On June 25, General Motors (GM), America’s largest auto company, announced its plan to invest $20 million into its Arlington Assembly plant in Texas, according to Reuters. With the new investment, the company aims to upgrade its equipment before launching its full-size SUVs.

Shares of high-growth technology company ServiceNow (NOW) have gained close to 16.0% since April 2019. It's gained over 60.0% since the start of 2019. It also had an encouraging run in 2018, when it gained 32.0% in market value.

25 Jun

Ford to Announce Q2 US Sales on July 3: What to Expect

WRITTEN BY Jitendra Parashar

Earlier today, Ford (F) said that it would announce its second-quarter US sales data on July 3. In the first quarter, the company reported a 1.6% YoY decline in its US sales to 590,249 vehicle units. During the first quarter, Ford’s truck sales rose by 4.1%, and its SUV sales went up by 5.0% on a YoY basis.

On June 25, Credit Suisse initiated coverage on Chipotle Mexican Grill with an “outperform” rating and a target price of $870—a return potential of 20.1% from its stock price of $724.13 on June 24.