Latest news and updates about changes in the global financial markets
A trade war with China or a shakeup in the White House are among issues that can spook the markets in 2018, reported “CNBC”
With mounting geopolitical issues, political uncertainty in the United States (U.S) and rising interest rates around the globe, this year could see many more ups and downs in investments. Here are three issues that investors should be paying attention to that could impact markets in 2018, according to “CNBC”.
1. Unrest in Iran
Unrest in the Middle East is always concerning for investors, especially ones who pay attention to the price of oil. While the recent protests in Iran will likely be contained to that region, if things flare up further, and if it does disrupt oil production.
That could have a negative impact on the global economy. It would push fuel prices higher, which would then make a variety of products more expensive. “If you suddenly don’t have as much oil as you need, then that could create inflationary pressures and become a concern from a GDP standpoint. Iran produces about 4.4 million barrels of oil per day.
2. A deteriorating American outlook
There’s an old saying, when the U.S. sneezes, the rest of the world catches a cold. If something unexpected happens to the U.S, then we could see a downturn elsewhere.
If significant information from, say, the Mueller investigation comes out or Trump sends a particularity egregious Tweet, then stocks could turn quickly.
The World Bank expects the U.S. economy to grow at 2.2 percent in 2018, while many firms, like Goldman Sachs, expect equities to continue climbing, but that could change if there’s a blowup in Washington.
With Donald Trump’s erratic and often offensive behavior, an ongoing special counsel investigation and an increasingly divided American public, domestic issues could get in the way of a continued bull market.
3. A more globally dominant China
China, the world’s second largest economy is becoming a more dominant global force by the day. In October, at China’s 19th National Congress, President Xi Jingping was written into his party’s constitution, which has led many experts to believe he won’t step down after his second five-year term. “I believe he’s going to be here for the next 20 or 25 years,” says Catechis.
In some ways, that could stabilise global markets, says Catechis, as Xi Jingping has said he wants to improve environmental conditions, offer better health care and create a more balanced economy. The country has lifted 400 million people out of poverty. This is a longer-term change in the global order, and what it means for investors is yet to be determined, but if America does take a more isolationist past, China will be there to fill the void.