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There is a saying that Singapore Bear Market always come every 10 years! There was the Asian Financial crisis that happened in 1997. It was followed by the US Subprime bubble burst in 2007. Will a financial collapse happen in 2017, 10 years after the last?
However this Donald Trump rally that happened in US does not seem to give much clue of a collapse coming. However similarly, no one did care about any collapse in 2006!
Is this Trump rally for real or just a bubble? Our duty as an investor is to be vigilant and get prepared for the coming year.
These are some market events in FY2017 that we think will provide both opportunities and danger for investors!
1) France and Germany election defeats will throw EU into chaos!
After UK’s BREXIT vote and Donald Trump winning the US election, it seems anti-establishment is the trend. People in the Western world are voting for protectionism and safety. Hence we do expect huge volatility in the stock market because of France and Germany elections in 2017.
France will be having their elections in April, Germany most likely will hold theirs from August to October, subjected to confirmation.
In European Union (EU), Germany is the largest, United Kingdom the second, and France the third in terms of GDP. If France and Germany anti-EU party wins, the world EU will be thrown into chaos!
Judging from the first French election poll, it shows anti-EU party led by Marine Le Pen could win presidential election in 2017. Even French PM admits she has a big chance now that Trump wins.
In Germany, Chancellor Angela Merkel approval ratings are plunging like a rock. If she is defeated and an anti-EU party wins, it will be a disaster for European Union.
Italy prime minister who recently lost their referendum 60-40% proves that in the upcoming election, the Anti-EU party has a big chance to cause an upset! Italy might bring forward their election to 2017.
What are the money making opportunities in this crisis and how do investors protect your portfolio before these elections?
2) Interest Rate – US interest rate will most likely rise at a faster speed in 2017 amid the inflation and huge fiscal spending under Donald Trump. This is certainly so when we look at the crashing bond prices recently after Trump was elected.
Mr. Trump in his rallies, said that U.S. economy is in a “big, fat, ugly bubble,” and warned of a stock market crash if interest rate rise. It is an irony now that he has to face this problem!
What is the impact of interest rate rise to the stock market? What should be the stocks you should invest in when interest rates rise?
3) OPEC Crude Oil production cut – OPEC has agreed to slash production by 1.2 million barrels per day in the first half of 2017. This will be the first OPEC cut in 8 years.
4) Bull Run of Commodities – Commodities indices have outperformed stock indices this year. We do expect this commodities run to continue in 2017!
The recent commodities index that went crazy is Copper!
Copper prices increase 25% since October.
As an investor, your job is to pick the commodities indices that have not run yet! What are those?
5) Bottoming of China economy and stock market – The Best way of making in the stock market is to always participate in one that has crashed! China has crashed and reached a bottom in 2016.
The government stimulus policies have shown to work and bring about the rise in property prices
How do you take advantage of the bottom of the stock market in 2017 and what are the China stocks you can Buy?
