Even in volatile markets and iffy economies, traders in all asset classes are eager to gain perspective on the near-term outlook for their favorite securities. As 2022 continues to establish itself as one of the most unpredictable for investors and trading enthusiasts, it’s important to explore several of the leading events and trends that could shape the remaining months of the year. While there are numerous issues and financial movers for the global economy as of Q3, dozens of them play a central or subsidiary role in the big picture. They include not only the Russia-Ukraine war but also inflation, the situation in China, consumer spending, the potential for an upcoming recession, the outlook for the major indices, and the pivotal commodities gold and oil. All play a role in the latest stock market dynamics and will almost certainly be part of the mix for the rest of 2022. Here’s more information about each one.
Russia-Ukraine War
Online traders who have followed securities prices since mid-February know how much the Russian invasion of Ukraine impacted international commodities and other sectors. One reason for the huge influence of the war is the role played by both nations in the natural gas, oil, and agricultural sectors. New and experienced investors began speculating on price rises in a long list of commodities once the hostilities began. Those who regularly use top-ranked platforms like metatrader 5 from AvaTrade have the ability to set a wide variety of trackers, price alerts, and other sector-specific features to keep a close eye on any asset class they choose to focus on. In the midst of a major Eastern European war, that kind of 24/7 watchdog capability can make it easier to decide when to enter and exit particular positions.
What’s the near-term outlook for the war? Many prognosticators doubted it would drag on for more than a month, yet the conflict has lasted at least four times that long. For many market watchers, the war is one of the central question marks in the 2022 economic conundrum because it could end at any time or just as easily last well into 2023. If it ends soon, look for oil prices to possibly drop and the most popular securities indices to gain some upward momentum. It’s wise to remember, though, that nothing is certain in the world of prices, trading, and international financial situations.
Inflation
Inflation is expected to get worse before it gets better, which means it’s not likely to die down before the end of the year. While that’s the bottom-line analysis, there’s more to it than that. In some sectors, the rate has already crossed the psychologically important 10% barrier, while the overall rate hovers between 8% and 9%. Because employment has remained stable, there’s an outside chance that the worst of the recent inflationary spiral is over. Stock market indices tend to offer views into the near future, at least as far as trader expectations are concerned. With the recent stalling of precipitous drops on most of the large international exchanges, it’s safe to say that consumers probably are slightly optimistic that the market has bottomed out. A less rosy but still better than doomsday feeling is that there’s perhaps one more downward leg to the current price declines.
China
Mainland China is in the middle of a series of COVID-related lockdowns that have wreaked havoc on the nation’s output. It’s impossible to determine whether that situation will change within the next several months. If it does, expect a positive effect on international indices and most sectors of the global economy. Mainland China, due to its sheer size, if not its efficiency, impacts dozens of consumer and industrial sectors around the world. When its domestic economy is ailing, as it is now, it can act to slow down any international economic recovery. Online investors should follow daily events in China, paying close attention to industrial output and COVID policy.
Consumer Spending
Often said to be the barometer of any nation’s financial health, consumer spending is a central part of the potential for a 2022 year-end recovery. The last two months of every year reveal precisely how much confidence and spare cash buyers have. Online trading practitioners should pay attention to corporate and government reports about expected and actual consumer spending leading up to the November buying season. It’s often the case that late summer and early autumn buying habits give a clue as to how strong holiday season profits will be. Solid numbers for August and September retail sales could serve as a reliable sign that consumers are still holding back or have decided to give the economy a boost.
