What a relief! US Fed had been listening to me 🙂 and decided, rightly, that it’s not time to raise rates given the weak inflation and penny-wage growth. Now, understandably a lot of investors are cheering that on (because borrowing money is still cheap and companies / households can borrow cheaply), but as yesterday’s market indicated, not everyone is staying excited with US stocks and if you can take a step back and look wider in the global financial universe, they are saying US is good but Europe is better, and sending funds flowing over there. Why this happens is explained in my Low-Risk High-Reward Investing Workshop and webinar series coming up in April. Email email@example.com to signify your interest!
Mainly, they say European stocks are cheap after the hammering they got last year due to low-growth almost recessionary era, but now with massive US-inspired QE unleased by the European Central Bank, everyone is hoping that it will follow that the economies will also grow and there’s that pull of “bargain buying” (just ask women how difficult it is to leave a shoe sale!), plus of course the promise of growing earnings from growing economies. So do have a read on why possibly “Everyone Hates US Stocks”
For me, the stock to beat is Apple, you’ve heard the news of Apple Watch, Apple TV services bundling cable channels, Apple Pay – all new product lines that will usher in earnings. If you like bargain hunting, prepare for the next two-three weeks when we transition to the next earnings season. AAPL now still valued at a fair PE 17.18 but could go lower, so my strategy now is to quickly take profits with any long position, to make sure I’ve got the cash for cheaper prices.
I project that it will be volatile with the tug of war between high valuation, weak data (Housing) and CPI and Friday next week we get the GDP reading in which investors could do the “bad news is good news” routine.
And yes, challenges make life exciting, watch this challenge to Apple Watch: