How to make money on the crisis of the US stock market

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How to make money on the crisis of the US stock market


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Home Finance, American market, AMarkets
How to make money on the crisis of the US stock market
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The Dow Jones Industrial Average fell more than 800 points, while the S&P 500 index went through the worst day since February. Both indexes were among the main outsiders, including due to the collapse of the technology sector, also set a record: he has fallen by 4.8%, which was the strongest percentage decline since August 2011.

The white House hastened to accuse in happened the fed, but rather its policies higher interest rates. Market participants attributed this trend with the increase of yield of us treasuries, remaining high in 2011. Given that Treasury bonds reflect market expectations regarding the pace of tightening US monetary policy, their influence on stock markets is obvious.

Us stock market dipped and amid prospects of slower global economic recovery. Apparently, the trade war between the U.S. and China still will be consequences for both countries. The President of the United States Donald trump during his speech last week again threatened the imposition of tariffs on Chinese imports in the amount of 267 billion dollars, if China will respond to the recently established tariffs by the US.

Because of the high probability that the conflict can not be resolved, the IMF lowered forecasts of global growth for the first time in 2016. In particular, it is expected that growth in 2019 will amount to 3.7% earlier estimate was at 3.9%.

The strongest lowering of the forecasts had on the economies of developing countries: Turkey, Brazil, Iran, Argentina, which is not surprising, because these countries face the most serious crisis of liquidity.

At the moment, traders are locally switched at the beginning of the quarterly reporting season in the US. The start was on the banking sector. On the eve of Morgan Stanley’s shares rose 2.5% and Goldman Sachs by 0.9% after the company reported better than expected quarterly earnings forecasts.

The results of the banks has contributed to the growth of the financial sector, which dragged the indices with the lowest levels.

However, despite the recovery, the key causes the previous sales have not gone away. The us yields remain at multi-year high and therefore interest of investors to the market shares will remain depressed.

Agree, if the market is the world’s most reliable bond yields a return, it makes no sense to tempt fate by investing in risky assets. After the publication of the minutes of the last meeting of the fed, market participants likely will receive another confirmation of the intentions of the us regulator to raise rates in December. Against this background, the yield on 10-year treasuries may well pass for 3.4%, providing even greater pressure on national stock markets.

In other words, the downward trend in the U.S. stock market is just beginning. We recommend you to take advantage of this, taking the corresponding short position with the aim of lowering the Dow Jones index to 2400 points.

If you want to earn in stock market you need the services of a broker. For example, you can apply to a regulated broker AMarkets that secures traders accounts in the amount of 20 thousand euros, and recently passed the audit, the largest consulting company Ernst & Young, confirming the financial viability of the company.

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