Global Stock Markets - Is now the Time to Jump In or Get Out?
From a momentum traders point of view, an object in motion will stay in motion until resistance forces the object to stop or reverse direction.
As a trader who's looking at the bigger trend, it's clear that many of the major global stock indices are currently trading within a multi-year uptrend cycle.
2019 was a spectacular year for stock markets
*During the last 52 weeks of 2019, these 15 global stock indices have gained an average of +22.61%!
*Source: Bloomberg
So, where do stock markets go from here?
Global Economic Outlook for 2020:
- 2019 was defined by the US-China trade war and hopes of a trade agreement
- During 2020 this pattern has potential to be repeated provided a US-China trade deal gets signed
- 2020 is a US Presidential election year and the current US Government (Donald Trump) will be pressured to get a trade deal done to keep the US economy growing and unemployment from increasing
- If no deal is done investors can expect US economic growth to be lowered, however in this case, Global Central Banks will be forced to find ways to add economic stimulus to boost growth
Analyst opinion: Further upside potential is favored for global stock markets and global commodities prices for 2020. Since either way, a positive outcome from any US-China trade deals or even without any trade deals, central banks will have to act by either adding stimulus or removing stimulus to keep global economic growth on track. Investors and traders should trade in the direction of the prevailing trends while remaining alert to add new positions on price corrections.
Source: FXGM Investment Research Department / Bloomberg