What lies ahead for the stock markets?

Its been a major week for the stock markets, and for those who have not kept up, were increasingly heading towards a potential stock market crash.

A publication in the Financial Times stressed that the US Treasury yields broke through a point of resistance at 2.66% by rising higher than 2.7%.

History shows us with the well known global stock market crashes of 1980’s and 2007 / 2008, that once this level of resistance has been crossed, a stock market crash is somewhat likely. This combined with the fact that there is already great economic uncertainty in areas of politics such as Brexit, or the lack of solidity in Donald Trump’s presidency, and it looks like 2018 could be a tough year for the stock markets. There are many external influences, aside from what the markets indicate that COULD cause a stock market downfall.

The already extremely volatile year of 2018 has shown us that the market is extremely hard to predict at this period of time.

A publication on Forbes tells us that following the crossing of the resistance line previously discussed, the S&P 500 has lost 3.9% for the week. Perhaps already showing us early signs of what’s left to come?

However, as already mentioned, stock markets are extremely unpredictable. No fortune teller could tell you when something will rise or fall. The reality is that it may simply be enduring a correction. This is entirely healthy and normal, and it involves the market taking a dip by stabilising to levels that are not as high.

Nonetheless, the first quarter of 2018 could prove pivotal for the stock market for the rest of 2018. Especially with great uncertainty ahead with Brexit and other political events.

Gvidas Beniulis

Creator and founder of Our Economy.

International Political Economy student at City, University of London.

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