Top Economic Themes to Focus on in Q4 – Introduction

To many investors, 2017 has been a largely successful year. The stock market in both the emerging markets and the developed countries has hit all times high. Commodities have made some significant recovery and currencies from the emerging markets have also recovered, albeit at a slower rate. The biggest winners are investors who bought cryptocurrencies like Bitcoin and Ethereum. They are rich now. In this article, I will look at the major themes that investors and traders need to focus on in the new quarter.

  • Federal Reserve Chair

The federal reserve chair is one of the most important people in the world. Some have argued that the chair is usually more powerful than the president of the United States. This is because the work of the fed chair affects all people, not only in America but around the world. For example, if the federal chair decides to increase interest rates today, the impacts will be felt by all people. This is different from the president’s decisions which might affect just a few.

This quarter, Donald Trump is scheduled to make his decision on the person who will replace Janet Yellen as the fed chair. This is one of the most important decisions that Trump is expected to make this quarter.

Before him, Trump is expected to make a decision on whether to retain Janet Yellen or replace her with people like Gary Cohn, Kevin Warsh, and Neel Kashkari.

Before Trump’s response to the Charlottesville riots, the clear nominee was to be Gary Coh, who serves as the national economic advisor. However, Trump started considering other people after Cohn’s comments against him.

I believe that Janet Yellen is the best of the said nominees. She has steered the fed in a clear direction that investors and all stakeholders love. In her era, unemployment rate is at the lowest point, the jobless claims have reduced, and inflation has been contained.

Depending on who Trump choses, the market will definitely move in approval or disapproval of his choice.

  • Corporate Earnings

At the end of every quarter, companies are required to publish their quarterly earnings. They publish their earnings and offer their conference call to their investors and analysts to update them on the performance of the business. This quarterly call is especially important because of the performance of the stock market. Since the market has performed really well this year, investors will seek to assess their portfolios to show whether the performance is backed by the real numbers. Traders and investors alike should watch these numbers very carefully.

  • North Korea

North Korea is an investment theme that should not be avoided. In Q3, the theme has been really important because of the rhetoric coming from the two countries. At the United Nations, Trump threatened to destroy North Korea. He even gave Kim Jong Un a new name, Rocket Man. From their end, North Korea tested several weapons, including one that can reach the United States. They threatened to fire back when attacked. At the beginning of the quarter the news about North Korea made the stock market tank and gold to rise. However, as the quarter progressed, investors shrugged the news from North Korea. The stock market stopped to react. In the new quarter, we will continue to monitor the situation coming from the country.

In the new quarter, we will also continue to watch the oil market and the news coming from OPEC. This year has been uneventful about the oil market. We will however watch whether Trump will decertify the Iran deal. We will also watch how the White House implements the promised Trump tax cuts.

Top Economic Themes to Focus on in Q4 – Useful Links:

  • To find out more, please, go to TheGuardian;
  • Another interesting reading on Independent;
  • Click on CNBC for further information on the matter.

 

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