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DataTrading Weekly Stock Market Digest (February 18 – February 22, 2019)

Starting from this week, the DataTrading team will track and share with our community the brightest stock market news to help you make better trading decisions and advance your trading! The major political, economic and financial world events of the week which influence the stock market will now be gathered in one DataTrading post!

Already four weeks in a row, the American shares finished higher this week with many emerging markets progressing. The S&P 500 has not encountered any major decline of 2% or more for the last month, so the downside volatility remains controlled. So what are the major factors facilitating the stability of the stock market since December 2018?

  1. beneficial trade outcome with China
  2. the Fed’s stopover and its patience when evaluating economic situation prior to hiking rates
  3. satisfying earnings period  

However, let us not forget that it’s just the beginning of the year, which means that both downside and upside volatility is likely to grow over time depending on different circumstances. This is why it is essential to create a beneficial trading portfolio which would include a mix of different stocks and bonds. February is the best time to think about your risk tolerance and long-term trading goals so you can keep trading even during higher volatility periods.

V-shaped market forecasts

So what global events have been influencing the stocks market recently? It seems that there’s nothing new on the financial and economic landscapes: US-China negotiations, Fed policy analysis, and some other minor economic issues in Europe and Asia. Let us give it time and see what happens. The stock market closed the week in surplus despite the unpleasant news touching upon tariffs, interest rates, economic readings, etc. Professional investors normally evaluate the stock market from a long-term perspective (not weekly or monthly).

The sharp decline in equities during the last months of 2018 created the first half of a V-shaped market. The second half of the V-shape was formed during January and February in 2019.

The Consumer Sentiment Index of the University of Michigan soared from 91.2 in January to 95.5 in February. What useful conclusions can we make out of this unpredicted increase?

  1. The longest US government shutdown in the history of the USA (35 days) did not have any real impact on the financial market according to Fed Chair Jerome Powell.
  2. The whales of the stock market did not believe the Fed Chair Jerome Powell
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