Baku, Azerbaijan, Jan. 29
By Taleh Mursagulov – Trend:
Alfa Bank, one of the largest private commercial banks in Russia, doesn’t see prerequisites for the S&P 500 Index to enter structural bear market, head of Alfa Bank’s analytical research department Boris Krasnozhenov told Trend Jan. 29.
He said that the dynamics of the US stock indices is largely determined by the parameters of liquidity and volatility. Also, the growth in algorithmic trading, which is largely based on news triggers, is becoming an increasingly significant factor affecting the market dynamics, he noted.
“Given the substantial geopolitical uncertainty and possible restrictions with liquidity in the market, we can well see fluctuations at 10-20 percent on the S&P 500 Index during 2019,” he said. “From the current levels, we can rather expect upward dynamics on the index in the first quarter of 2019.”
At the end of last year, the US stock market showed significant decline against the backdrop of investor distrust of the Donald Trump administration’s statements about a temporary “ceasefire” in the trade war with China.
Investors fear that differences between the two locomotives of the global economy may slow down the development of the global economy. However, Bloomberg early reported citing the sources at the White House that in order to revive financial markets, Trump is seeking to conclude a trade deal with China in the near future.
With the collapse of the US stock market, investors started thinking more seriously about investing their money in the assets of developing countries the economy of which is showing good growth rates. In particular, the stock market of developing countries is of interest.
In accordance with the World Bank forecasts, the economies of developing countries will grow 4.2 percent in 2019.
---
Follow the author on Twitter: @TalehMursagulov