Volatility, Europe & Your Investments

By Al Emid via Iris.xyz

While a number of well-known and very specific reasons explain the current volatility in the stock market, at least two broader considerations confuse clear analysis: the unknown proportion of the recent sell-off attributable to tax loss selling before the yearend in December and the sheer complexity of the current tumult, with more factors converging together than ever in recent memory.

Clearly, much of the current discussion about stock market volatility centers on factors at work in the North American stock markets.

Not surprisingly, much analysis examines made-in-the-USA factors such as whether the Federal Reserve (the ‘Fed’) will raise interest rates again, and if so how many times, by how much and when the rises will occur. A more or less equal amount of attention focuses on problems with the FAANG stocks (Facebook, Amazon, Apple, Netflix and Google/Alphabet).

However, global geopolitical and macroeconomic factors, such as BREXIT and the slowing of both the European economy and the Chinese economy also affect the equation. In this article I review the effect of the European slowing and in future will examine the impact of China and other emerging markets.

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