By Al Emid  

Toronto – Canada

 

 

 

 

 

Al Emid has worked in communicating ideas and concepts since beginning his career at an educational television network in 1967.  He is the co-author and author of several financial books, most recently The Emid Report on Volatility 2019 available on all major book sites.

 

 

 

Chapter 4

 

Volatility As The New Normal

 

 

 

During the launch of my book on volatility, I responded to a question about the outlook by suggesting that volatility in the stock market had become the new normal and that it would continue until at least well into 2020.  Several listeners reacted with quiet groans – not so much in disagreement but more likely hoping that it was inaccurate.

 

It was one of those times when I would be delighted to be wrong and time will certainly tell. However, in the meantime I will submit some proof by checking four of the main volatility villains.  There were many causes of the market tumult in the Fall of 2018 and most of them continue affecting the market: the trade dispute between the United States and China, the ongoing BREXIT imbroglio, the continuing  debate over interest rates and an erosion in the so-called FANG stocks: Facebook, Amazon, Apple, Netflix and Google (Alphabet).

 

At time of writing, each of these factors remains uncertain and unresolved.  Recently a series of negative reports on the outlook for the U.S.-China talks led to a sharp downward plunge in North American stock markets.

The BREXIT saga continues to overhang the British stock market and British lawmakers may or may not find a resolution in Fall of this year.  

 

The interest rate debate continues almost every day.  When observers read a pause or a rate into remarks by Federal Reserve Chairman Jerome Powell the markets react positively.

 

In terms of the FAANG stocks, Facebook faces calls for its breakup and those calls could increase with the onset of the American election.   Apple, while a solid stock, has an unclear future in the China market.  Netflix faces a streaming onslaught from the Walt Disney Company with its huge library of iconic entertainment.

 

 

 

 

 





Comments are closed.

 

 


hey