Volatility and turbulence ahead
After last week's volatile market due to the Federal Reserve hinting at the tapering of bond purchases, we are seeing some green as the market rebounds slightly with some key news. However, does the greens today provide us with a indication of how the next couple of weeks are going to be, read on to find out.
Firstly, today's green was mainly due to the rebound from last week's excessive fear of inflation rates as bond-purchases by the FED is slowed and tapered. However, this is by no means an indication that inflation fears are gone. These fears are just slightly put in the backseat as investors wait upon the upcoming symposium to get a clearer picture of the actions by the FED on their actions towards bond purchases.
Secondly, today we saw a slight rebound in the Chinese tech market as earlier in the day, we saw the rather encouraging greens in the Hong Kong market. This looks like a good sign for the Chinese market as more investor sought the chance to purchase stocks at a massive discount. However, this is a rather weak indicator as it might not necessarily reflect the permanent sentiments of the investors in the US market. Furthermore, there are still lingering possibilities that more regulations are in store for Chinese companies that might further affect their share price.
In conclusion, we will be seeing a clearer picture of the direction in which the market is moving towards as the annual symposium occurs this week. There will definitely be more eyes on deck to be mindful of the FED action towards assets purchases and their solutions for inflation that might come along with it. There will be much volatility ahead! We are not yet in the clear zone and this turbulence might just last until the rest of the year until a clear direction of the market has been establish. Until then, it would be wise to reconsider your strategies.
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