Twisted Flames
19th March 2016, 05:19
Overall, this year has been a bad year for investors. Energy prices are falling, slow economic growth globally and central banks are taking drastic measures to stimulate the economy, such as the ECB and the bank of japan resorting to charging negative interest rates.
The first 3 weeks of 2016 witnessed a huge selloff of stocks by investors, primarily due to the fed projecting 4 interest rate hikes this year, causing volatility in the stock markets. Couple that with the slow economic growth in china, diving energy prices and you get a recipe for a recession.
The IPO (initial public offering) market is absolutely dead right now. In other words, not many companies are going public into the markets. This is the sign of a bad economy, less companies going public is a sign that investors are seeing IPOS as too risky.
Dividends on stocks of major energy producing firms have been cut drastically, to cope with the severe decrease in oil sales.
But there's still some good news. The fed's announcement as of recently clarified that they will only raise interest rates twice this year, lessening the sense of volatility in the stock market and in the process devaluating the dollar. The devaluation of the US dollar to it's major competitors is actually good news, despite what you may think. All oil exported by OPEC countries is priced in dollars, so a decrease in the value of the dollar makes it easier to obtain by countries. Thus, a lot of countries are able to purchase more oil and driving up the oil prices, stimulating the overall economy.
The first 3 weeks of 2016 witnessed a huge selloff of stocks by investors, primarily due to the fed projecting 4 interest rate hikes this year, causing volatility in the stock markets. Couple that with the slow economic growth in china, diving energy prices and you get a recipe for a recession.
The IPO (initial public offering) market is absolutely dead right now. In other words, not many companies are going public into the markets. This is the sign of a bad economy, less companies going public is a sign that investors are seeing IPOS as too risky.
Dividends on stocks of major energy producing firms have been cut drastically, to cope with the severe decrease in oil sales.
But there's still some good news. The fed's announcement as of recently clarified that they will only raise interest rates twice this year, lessening the sense of volatility in the stock market and in the process devaluating the dollar. The devaluation of the US dollar to it's major competitors is actually good news, despite what you may think. All oil exported by OPEC countries is priced in dollars, so a decrease in the value of the dollar makes it easier to obtain by countries. Thus, a lot of countries are able to purchase more oil and driving up the oil prices, stimulating the overall economy.