Many individuals underestimate the effect that the stock markets have on their everyday life.
If you’re a stock trader, the connection is clear. However, you might be surprised to know how it affects a local grocery store cashier or a personal trainer.
It’s important to have a solid understanding of the stock market forecast for 2019 so you can prepare accordingly.
2018 provided a very unique market environment. Volatility came back into play after a major drop from stocks in early February. Oil and energy have made moves not seen before in decades.
A record number of professionally managed funds were shut down as they failed to keep up with the ever-evolving landscape of the stock markets.
With all the turbulence of 2018 behind us, what can we expect to unfold in markets in 2019?
China and U.S. to Finalize Trade Deal
One of the biggest causes for concern in 2018 was what has now become known as the “Trade War” between the U.S. and China.
In July of 2018, the U.S., behind the direction of President Trump, announced that it wants to equalize the trade imbalance that existed between the U.S. and China.
They did this by first instituting $34 billion worth of tariffs on Chinese imports to the U.S. They have since increased that number and the percentage at which they tariff China dramatically.
The beginning of 2019, however, has opened up some windows into what might be a resolution of this trade war.
China and the U.S. are consistently scheduling meetings and aiming to come to a solution in the short term. It is believed that this trade dispute will come to an end this year.
This resolution would go a long way in boosting the overall economies of both countries, and even more specifically the U.S. stock market.
Shaky IPO Markets
In the first half of 2018, the markets had a relatively “hot” IPO (Initial Public Offering) market. This means that conditions were prime for private companies to take the jump into being publicly traded.
However, in the second half of the year, we saw this trend change, and IPOs didn’t seem to be quite as successful as initially forecasted.
We can expect this downward trend to carry into 2019 as well, even though major companies like Uber, Lyft, and Airbnb all expect to go public.
More specifically in the technology sector, we have companies like Slack that also plan to go public in 2019. Slack is expected to be valued at roughly $10 billion.
While plenty of companies will move forward with their anticipated IPO dates, one thing is for sure. Their reception to the public markets could be a shaky and unpredictable one.
Be sure to be cautious with new IPOs.
Major banks and analysts are mixed on how they see the markets performing in 2019. JP Morgan Chase has come out on record stating that they believe that markets will be bear markets. This means that they will downtrend.
Godman Sachs, on the other hand, disagrees and expects the markets to modestly grow upwards.
One thing that most analysts do agree on, though, is that the ride will be a bumpy one. It’s fair to expect the markets to have large swings to both the upside and downside.
There are many critical worldwide events and conflicts that will lead to this continued volatility. On the positive side, potential events, such as the BREXIT resolution and the trade war resolution, will drive the markets up.
On the negative side, we can expect political uncertainty to continue to shake up markets especially as the U.S. moves towards its next Presidential election.
Luckily, in our markets, we can actually make money as stocks lose value. This is known as “shorting.” Find out more about how this works!
It can add diversity to your investing strategies, and give you an opportunity to make money in any market conditions!
2019 Stock Market Forecast
For the last four years or so, technology stocks have taken the markets by storm.
They have been so powerful they were even given a fancy name known as “FAANG.”
These technology stocks lead the strength of the U.S. and global economy. Many other sectors and industries found strength thanks to the overall boom in the technology sector.
However, in late 2018 and so far in 2019, the forecast looks to be different.
The stock markets are now in a bit of a discovery mode as they look for a new power sector to provide leadership.
Historically, small-cap companies have also provided tremendous strength to the markets. Unfortunately, those have also faltered and limped across the finish line in 2018.
Analysts are widespread on their thoughts of which sector will provide the most strength moving forward. Projections from the cannabis, electric vehicle, and even space technology industries are all candidates for potential strong sectors.
As of now, it’s a complete toss-up, but we can expect that to be cleared up in the coming months.
Take Steps to Further Prepare for 2019
With so much uncertainty in the financial world, it’s important to do all we can to make sure we’re prepared and educated on our options moving forward.
Having a good understanding of the 2019 stock market forecast is an important aspect to help you prepare and mitigate risks.
However, being well prepared financially is only a small part of making sure we are ready for our future.
Be sure to check out our blog for more helpful trends to look out for.