The stock market has shown signs of improvement through some energy companies. However, investors are still in doubt if this growth is sustainable? Will it last or it is just fast?
The economy has been at an almost standstill over the last 12 months. Market trends have shown odd highs and lows. Likewise, for stock market stalkers, the close of business Friday is indeed very interesting.
The Bulls Awaken – The Gains
The stock market has remained mostly flat during the week; however there have been signs of a revival in the markets. Southwestern Energy Co stock has risen 15%, Norfolk Southern Corp stock has risen 10.53%, and Range Resources Corp stock has risen 6.94%. Likewise, DOW stock has risen by 21.23 points (0.12%, up 3.32% overall in 2016), S&P has risen by 0.1 points (0.00%, up 2.33% overall in 2016. Other companies with gains include Endo International PLC (+2.15), Murphy Oil Corp (+2.03), Chesapeake Energy Corp (+0.36), and Hess Corp (+3.20).
The Bear Hasn’t Given Up – The Loses
It’s not all good news. Microsoft Corp stock has fallen by 7.17%, Perrigo Company PLC stock has fallen by 5.70% and Alphabet Inc (GOOGL) stock has fallen by 5.41%. Same case as NASDAQ stock which has taken a hit with a loss of 39.658 points (0.80%, down 2.02% overall in 2016).
Other companies with losses include Alphabet Inc (GOOG) (-40.37), Starbucks Corp (-2.96), American Airlines Group Inc (-.80), Royal Caribbean Cruises Ltd (-3.00), and United Continental Holdings Inc (-2.02).
Winners and Losers
The figures have revealed strong gains within energy companies and huge losses within technology companies. Investors were concentrating on companies earnings. Despite the gains, the overall picture was not good.
American Airlines Group Inc current stock price of $38.21 (-1.80) has been blamed on the costs of labour and weak fares.
The Worldwide Markets
The global markets are not looking that much better. London (FTSE 100) fell by 1.11%, whereas Hong Kong (HANG SENG) fell by 0.72% and Germany (DAX) fell by 0.60%. In contrast Japan (NIKKEI 225) rose by 1.20%.
Other global markets include –
- Shanghai Composite (China) +0.22%
- Mexican Bolsa (Mexico) +0.12%
- CAC 40 (France) -0.29%
- Brazil Bovespa (Brazil) 1.35%
What This Means For The Future
The stock market is full of ups and downs; it rarely ever stays static for a prolonged period of time. So, the big question at the moment is will the stock market continue to slowly rise?
There are reasons to believe that the markets will continue to improve. Investors have been putting their money towards junk bonds and small companies, a move which is considered brave. Also, overall, stocks tend to rise over a period of time.
However, more companies are reporting a decline in earnings. This could affect the market whilst investors are taking earnings into consideration. When stocks appear to be falling, sellers will attempt to sell their shares at a lower price.
Stocks and shares should generally be seen as a long-term investment rather than short-term. The bottom line is that it is impossible to say for certain. Too many influences have an effect on the market.
Financial experts believe that if you compare crashes of the past with the current trends going on at the moment then we could soon be heading for another crash sooner than we think. It is generally a shared view amongst the industry that we have not learnt out a lesson from the last financial crash.
One expert who is predicting another crash is James Dale Davidson. Davidson is a well-respected economist who has correctly predicted financial crashes in the past. Davidson is so well respected that he has made impressions with a number of political powers including George Bush snr, Donald Trump, and Ronald Regan.
His fears for the economy have been documented in a leaked video. Davidson states in the video that several warning signs indicate that it is time to sell. He goes on to say that the financial collapse is already on our doorstep.
Davidson did not intend for the video to be shown publically but since it’s leaked it has caused a lot of controversies.
Should we be paying attention to Davidson?
There Has To Be Crashes In The Economy
If you go by the basic principle that what goes up must go down then it would seem that another financial crash is inevitable. Think of the economy as a cycle where you have recovery, growth, decline, and then collapse. The economy is reliant on the financial industry to stimulate growth, when this is no longer possible then the whole thing collapses.
Friday’s stock market shows a small percentage of growth. Although any signs of growth are an achievement, we cannot dismiss the overall picture. The real question should be “is further growth actually possible?”