Ahmed Nashaat Discusses the Impact of the 2018 Market Volatility

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The year 2018 has been an odd for Wall Street so far, with volatility seldom seen before. Indeed, on an almost daily basis, the market goes from extreme highs to extreme lows and back again. Inflation is resurgent, whereas corporate earnings and economic data is supportive. There is uncertainty about trade policies and there are some significant geopolitical issues at play. All of these issues impact the markets, according to Ahmed Nashaat, but it seems that all these extreme swings and gyrations have had little to no real impact overall.

Ahmed Nashaat Discusses 2018 Market Volatility

The current state of Wall Street is, by and large, exactly what it was at the end of last year. Some stocks are up, others are down, and they pretty much balance each other out It seems that markets, therefore, are keen to stick to what they know, something is shown, for instance, in the fact that the S&P has broke records by crossing the break-even point for the 8thtime this year alone.

Naturally, investors are very much aware of this. Trading has been up, but there is significant uncertainty about what the next move is going to be, shown, for instance, in the fact that the Dow only gains slightly as of late. Some 41% of investors currently describe themselves as “neutral”. According to Ahmed Nashaat, this means that they don’t believe there will be much change over the next six months. At least 31% of investors have felt like this for 12 weeks running now.

What this also means is that investors are neither optimistic nor pessimistic 33.5% of investors are bullish and 25.5% are bearish. Both of these percentages are lower than what they used to be, which points to a trend. Optimistic and pessimistic investors have been lower than average in percentage for 11 and 22 weeks respectively.

Optimists say that the muted inflation data, excellent earnings, are tech stocks recovering are good signs. Pessimists, meanwhile, say that the economy has been expanding for nine years and should, therefore, start contracting very soon. They cite that there is global money tightening as well.

So what have the markets looked like this year? After 93 days of trading, 32 had a 1% move up or down on the S&P500 and they had an around 36% ratio. This shows that there is a lot more volatility than ever before and it also suggests that the market is unlikely to move much more this year. However, investors generally do not feel that the secular bull market will, therefore, come to an end. Rather, they feel it is a normal pause that is simply the result of more volatility. If true, however, this could spell some trouble.

AhmedNashaat believes that it is very difficult to make any kind of investment decisions in the current market. People are unwilling to take risks and quite rightly so. However, it is unclear whether simply holding on to existing investments is the right move either. Only time will tell.