The IMF finally got around to what I’ve been saying for a while, China is weakening and sure will drag the global economy. Canada just had 2 quarters of contraction – which technically means they are in Recession. Australia registered a teeny-tiny increase in GDP a .2% increase. Brazil and Russia have been sad stories for a while due to the commodities (iron ore and oil) falling off a cliff since last year. IMF report here.
China is on holiday today and bargain hunters have started to load up on the oversold stocks yesterday, and can potentially continue till there is another reason to sell. Like, next week when China opens again, nobody knows for sure when, so like what I’ve been saying to people keep tight watch of your holdings or be prepared with hedging strategy. I had a position for AAPL falling last Monday and it was hugely profitable Tuesday, my mistake is I didn’t wake up for the close to take the profit so by Wednesday, I had to give up some profit since it went back up in anticipation of the China holiday “buying spree” by the Chinese govt agency. Still, it gives me confidence that I am “one” with the market moves. Yesterday was a huge move once again, can you believe how volatile the market is, it’s still a few days away from the US Fed meeting, so hmmm, get used to it.
Back to the US Fed rate rise, my fearless forecast is that they won’t raise rates – yet. A lot of rock star investors / traders are saying the Fed can’t hike in this kind of market uncertainty, but I know for sure that once they raise rates, US dollar will rise, their neighbour Canada – already in recession will grow weaker (US exports is at 19% to Canada accdg to the CIA Factbook) and that can’t be good for BOTH of them. So,,,, those job gains which they said is the primary basis for their rate rise is going to lose its importance. The wage gains can hardly be felt (I’m missing the Big Mac Index). Besides, with the number of “undocumented migrants” they have (who presumably are not in the “official” list because they don’t claim for jobless benefits anyway), the REAL unemployment is still high at 23%. (Where did I get that figure – google it)
So anyway, with the temporary respite from the interest rate increase — these “ber” months the market is going to be pressured by the falling commodities, weakening economies (because, answer this – where is the growth coming from?), currency wars and watch for it, China. The valuation remains stretched and the natural forces of the market will be unstoppable.
I discussed all this in detail in the webinar last week “Is it time to buy”. Yesterday I had a repeat scheduled of at 8pm – which is what I’ve scheduled in my Facebook posts but there was a confusion because in the webinar platform I scheduled it for Sept 1, so sorry all along I thought I had it for Wednesday, but anyway, I will be sending out the link to the video recording to all who registered. Apologies for any inconvenience caused.
So with all this volatility, it is all the more important to know how to protect those profits, find the opportunities.
Understand the market conditions and the moves happening. I discuss actionable and proven ideas in my
Low-Risk High-Reward Investing Workshop / Webinar series.
Sept 19, 830am
2/F Ortigas Building Conference Room
Ortigas Avenue, Pasig City Metro Manila
Philippines.
The webinar version will be available to accommodate my audience in different parts of the world.
I will announce the schedule next week.
Meantime, enjoy the China restday paydays. Here’s Septembear.
http://www.bloomberg.com/news/articles/2015-09-02/china-stock-futures-drop-before-holiday-on-state-support-concern
http://www.cnbc.com/2015/09/02/this-is-a-very-real-bear-market-gartman.html
