The first quarter was a great one for stocks investors. Here are the Key Market Expectations for the Second Quarter of the year.
Friday was the last trading day of the first quarter, which is an indication of how fast the year is moving. The close of US markets was an important day for investors who were long the market. This is after stocks gained by more than 10% in the quarter (here a deepening about it). This turns the focus among investors to the second quarter. In it, they will watch out for the following news.
Unicorn Initial Public Offerings
On Friday, Lyft became the first major unicorn to go public. The company raised more than $2 billion valuing the company at more than $20 billion. After the open, the company’s stock moved up by more than 20%, an indication that investors have the Fear of Missing Out (FOMO). In this quarter, traders expect more IPOs. Some of the companies expected to list are Uber, which is a competitor of Uber and is currently valued at more than $120 billion. Pinterest, the visual board company has submitted its IPO documents and is expected to have a value of more than $12 billion. Others include Palantir Technologies, Airb&B, and Slack.
Central banks were major drivers of the rally experienced in the first quarter. They were led by the Federal Reserve, which started the year sounding negatively. This was after the hawkish statement that came up after the December meeting. As the year started, officials started to sound dovish, saying that they were likely to halt rate increases. This was a positive thing for the market, which had turned a bit negative about the stock market. After the Fed, all other central banks like the ECB, RBA, RBNZ, and BOJ turned negative.
The United Kingdom was expected to leave the European Union on Friday last week. This did no happen because the country managed to get an extension from the EU. However, the chances of a no-deal Brexit are increasing. This is because the parliament appears to be in disarray. Just last week, the members were unable to pass 16 bills that they had suggested and on Friday, Theresa May’s bill was rejected by parliament for the third time. Therefore, in the coming weeks, the country could see itself leaving the EU without a deal.
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The talks between United States and China will continue into the second quarter. This after the talks receiving a backing and extension from Donald Trump. Therefore, there is a possibility that the talks will yield some important outcome and remove the cloud that is existing between the two countries. If the talks end without an agreement, the results will be significantly negative to the markets.
The global economic growth is expected to slow this year. The data released in the first quarter showed this. In fact, all the major global organizations like IMF, World Bank, and OECD have warned that the economy will slow in the year. The trade tensions between United States and China have increased this slowdown talk. Therefore, traders will continue to pay a close attention to the data to evaluate whether the slowdown talk will continue.
Discover 6 Global Companies to watch out for next quarter.