A Look at the First Half of The Year – Introduction
2017 is turning out to be a very interesting year. The market is hitting all-time highs. Crude oil has remained in a narrow range throughout the year. The dollar has weakened against the major currencies. A few tech companies like SnapChat have become public companies and the value of Bitcoin and Ethereum have tripled. In this article, I will look at the most important things that happened in the first half of the year and how they will impact the future.
- New Presidents
In the first half of the year, the world saw three new presidents from the developed nations. Donald Trump was sworn in the third week of the year while Netherland elected Mark Lutte as the Prime Minister. In France, the youthful Emmanuel Macron won the election. The entry of the new leaders is significant especially in Trump’s case. Trump promised to dismantle the old way of doing business. At the NATO meeting, he failed to commit to the Article 5. The article 5 states that NATO countries will protect one another in times of an attack. Last week, he abandoned the Paris Climate agreement. For traders, these are important things that should be looked at carefully. How will they impact the world’s biggest economies?
- OPEC Meeting
A few weeks ago, OPEC leaders met in Austria to deliberate on the current oil prices. As you remember, oil prices have fallen by more than 100% in the past three years. This was as a result of the continued oversupply in the market. More countries like the United States and East African countries are currently producing oil. To solve the situation, OPEC countries have decided to cut their own production. In the recent meeting, the countries promised to extend their oil reductions until 2018. However, investors have already priced in their measures which are not expected to add any value to the crude oil prices.
American countries released their Q1 results a few weeks ago. The results were mixed across the sectors. Investment banks like Morgan Stanley released excellent results pushing their stock price higher. Goldman Sachs flopped. Technology companies like Google and Facebook continued releasing excellent results while Apple’s weakness continued. Amazon’s stock price climbed to cross the emotional $1000 level. Infrastructure companies climbed as Trump promised to invest massively in infrastructure.
- Growth in Cryptocurrency
The world of cryptocurrency has turned out to be the best performers this year. Currencies like Bitcoin and Ethereum have more than doubled this year. Bitcoin is currently trading at $2500 while Ethereum is currently trading at $250. The rise in the value is because of the improvement of the technologies beneath the cryptocurrencies. There is also high demand for the bitcoins and ethereums among international traders. In the remaining part of the year, we will watch this space carefully and see how it performs. For now, I recommend that you buy one or two ethereums. By doing this, you won’t have a lot to lose but you will have a lot to gain in case of a price increase.
In the past few years, commodity prices have been depressed because of oversupply and weakening growth in China. Metals and agricultural commodities have been affected by all this. This year, the price of these commodities have risen, but not much. Commodities like coffee are still being depressed because of growing oversupply. Crude oil and Gold continues to trade within a narrow range as well. Going forward, we will look at the Chinese economy and the demand and supply issues.