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Another 28 days left for 2016 to begin and hence its an high time that we should prepare ourselves for couple of very strong ride to be witnessed in the equity and global macro.  2016 will be a power pact year where we will witness some very string economies going for elections. US will have its Presidential election followed with Taiwan going for the same. Europe will be knocking the doors for Referendum followed with Russian banks going for a wild toss. Among all these China will be coming up with its 5 years plan which will be decide the fate of the Emerging economies growth. US interest rate hike have been discounted now, provided it goes for some bold hike in rate percentage. Europe Referendum would be very crucial since the current case of Syria and its refugee policy might harm the Euro countries.  Further Mr. Alex will require vote support for cutting down spending and increasing taxes which will be another trauma for the global equity and economy. Europe will give lot of intense pressure on the nerves since we have seen the situation of Greece and hence the recent policy of Europe regarding Syrian refugees might create problem in getting majority support.
Russian banks will create panic since the country will enter into the 2nd year of its recession and Russia will try its best to have a war so that crude prices increase in the near term giving massive relief to its oil based economy. Crude  will be under pressure and the most interesting part will be to watch out how OPEC and Middle east will play its dice since the global economy is running short of storage and these fellows have no inclination to reduce production. China will design very aggressively its 5 years plans since it will try it’s hard to get the GDP back to 7% or 7.5% and hence its economic policies will also decide the fate for the flow of global currency. US Presidential election will decide the fate for the socio economic cots burdens and also this will be a key factor for Indian Pharma Industry who is heavily dependent on the same.
In between china’s currency might come up in the basket of IMF and also petro–yuan might come up as china is aggressively buying crude and creating huge storage reserves hence the dollar rule might get shock.  Brazil is under huge Debt to GDP ratio and hence little growth could be expected form the economy. Indian economy is based on reform policies and its GST rollout will decide the fate of the country followed with Land Acquisition bill. India might be sweet spot to invest but delay in reforms could be a huge set back.
Low commodity prices and crude prices are a boon for the emerging economies but the recent slowdown of the Chinese economy has created massive hole within the profitability pocket of US companies followed with many other countries.  Declining US shipments is being ignored and all are focused towards rate hike. US is still a coming of the recession and its not in expansion phase.   US interest rate hike will lead more countries to go ahead for interest rate cut down so that inflow of capital and investments keeps its momentum. 
There is utter confusion regarding both the things. Among all these few industries will be making billions through the US and Taiwan election. The media and social media marketing companies’ share values are just going to jump by many folds.  Currency war has already began and we will witness few more currencies are made cheap for doing exports.  Syria war might be a big topic for the global economy and many countries will come together since war will be short term relief for the global commodity market. Business strategies will change based on the policy frame work and currency polices being adopted.
Emerging economies asset bubbles are just bursting and we have witnessed the same in 2015 but a major part of it is left out since Banks are yet to take the hit in their books once the accounting year comes to an end.On an overall basis it could be said that all these events will keep the global equity markets under high volatility followed with high growth phases which will take time to take shape. Those who are investing should invest for long and should book profit periodically since too much long trade in equities can take you into massive losses.


Published by

Indraneel Sen Gupta
(Vice President-Business Development,Research & Product IFAN Finserv Private Ltd.(SPA Group Company) )
Category Shares & Stock   Report

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