As the new year begins, expert commentators give their point of view on what 2018 has in store.
Here are three major themes to watch during the next 12 months.Can the stock market rally?
The new year has started with stock markets in the UK and WE reached new heights.
The Dow Jones Industrial Average has increased by more than 25 000 points for the first time this week, while the broader S&P 500 is also at historic highs.
In London, the FTSE 100 closed on Friday at a new record low of 7,724 points.
But could the stock markets on both sides of the Atlantic change course and come crashing to earth this year?
Sonja Laud, manager of shares of Fidelity International, believes that it is a possibility. While the fundamentals of the market remain quite strong, there is “very stretched valuations in most asset classes,” she said.
After having kept the money taps switched on during the last decade, in the wake of the financial crisis, the u.s. Federal Reserve will begin to cut back on the stimulus, known as quantitative easing, in 2018.Kamal Ahmed: Three reasons why the stock markets are at record levels
Richard Dunbar, investment director at Aberdeen Standard, said that the flow of debt facility cash from central banks has driven the markets in recent years. Investors should now be ready for “more modest returns in all asset classes,” he said.
Mr. Dunbar is also an expectation that inflation begins to rise in the united states in 2018, given that unemployment is at 17 year low and wage growth is picking up.
Despite being at record levels, the united KINGDOM, the stock market rally lags behind that seen on the Wall Street and major European markets.
In the year 2017, the FTSE 100 has increased in value by 7%, compared to 12% for the Dow Jones and 15% for the German Dax.What form will take a “brexit”?
Another topic that will loom over the markets of the united KINGDOM and the economy is “brexit”, as the trade negotiations with Brussels go to class.
Companies and pressure groups have called on the government to retain easy access to EU markets, and work, without additional fees or paperwork, but the final form of a trade agreement remains unclear.
Ms the Praise of Fidelity, said the specter of brexit still weighs on the united KINGDOM. “That could create a lot of volatility this year, she says. Business calls for brexit clarity
Vicky Pryce, chief economic adviser at CEBR, said the uncertainty about the shape of Britain to leave the European Union has led many national and foreign companies – have been reluctant to make long-term commitments.
Ideally, they want as few changes as possible to the status quo, she adds, and believes that the government is “moving slowly in this direction.”
For Roger Bootle, chairman of Capital Economics and a high-profile brexit supporter, he hopes that the united KINGDOM is able to find a “deep and special” trade relations with the EU.
But he is not too worried if this is not the result: “I think it is perfectly possible for “brexit” to deliver some very good results for the united KINGDOM, even if we don’t have this case.”Can the cryptocurrency craze to continue?
The surprise at the end of the tail of 2017 has been the sudden increase in the value of Bitcoin to almost 20 000 $in a point $1,000 at the beginning of the year.
Although it is not the only digital currency, Bitcoin is the one with the highest public profile and is attracting the most interest in the world.
While some were alarmed at the increase in stratospheric in the cryptocurrency of the value, others are convinced that it is now a new asset class that will continue to earn value.What is Bitcoin?
Catherine Mulligan, co-director of the Imperial College Centre of Cryptocurrency Research, said that the new way of trading Bitcoin are allowing small investors to get in on the act.
However, 2018 is also likely to bring greater regulatory scrutiny of cryptocurrencies in an effort to protect consumers, she adds.
Unlike currencies, they are not supervised by the central banks and the possibility remains that some speculators could get burned badly if the value of Bitcoin, for example, plunges.