The Q1 2012 is going to be a roller coaster ride, with Europe front and center. Europe is widely expected to have slipped into a mild recession during Q1 and this could lead to more downgrades of national credit ratings. In the US, investors have been encouraged by strong readings on consumer confidence, modest gains in payrolls and glimmers of a turnaround in the housing market. At the same time, corporate profits are expected to continue rising and the Fed will probably keep interest rates low well into 2012. Volatility is likely to remain elevated in Q1 given the uncertainties surrounding the global economy. Despite the expected turmoil in H1 2012, many analysts expect stocks to post full-year gains between 6% and 10% as the global economy stabilizes.
Tuesday, January 3, 2012
Looking for direction
The Q1 2012 is going to be a roller coaster ride, with Europe front and center. Europe is widely expected to have slipped into a mild recession during Q1 and this could lead to more downgrades of national credit ratings. In the US, investors have been encouraged by strong readings on consumer confidence, modest gains in payrolls and glimmers of a turnaround in the housing market. At the same time, corporate profits are expected to continue rising and the Fed will probably keep interest rates low well into 2012. Volatility is likely to remain elevated in Q1 given the uncertainties surrounding the global economy. Despite the expected turmoil in H1 2012, many analysts expect stocks to post full-year gains between 6% and 10% as the global economy stabilizes.
