What a year 2016 has proved to be so far. A series of major events over the course of the year have massively influenced financial markets, making 2016 this decade’s most exciting year for investors. But it’s not over yet.
As regular readers of our research will know, every quarter we highlight the top 10 stocks we believe will outperform the market in the coming quarter, providing opportunities for short term traders and long term investors alike. With a mix of blue chip heavyweight defensive, retail and utility providers, each of our stock picks has potential to provide returns just in time for Christmas. Alongside the usual Q4 Santa Rally, investors have a lot to look forward to.
Moving into the final quarter of the year, a packed events calendar is going to create opportunities aplenty for investors, Q4 2016 is guaranteed to produce a fantastic final fireworks display thanks to these five key events:
Clinton vs. Trump
The US Presidential election. The headline event of Q4 is without a doubt the heavyweight bout between Presidential hopefuls Hillary Clinton and Donald Trump on November 8th. The former viewed with increasing scepticism from voters worried about trustworthiness, while the latter is unpredictable at best. When our stateside partners head to the polls will they choose to vote in President Clinton and her vast political experience or instead go for President Trump and his decades of business acumen? The status quo of Democratic nominee Clinton is seen as favourable for financial markets, but four years of businessman Trump could still provide the opportunity for investors to win big.
Au Revoir, Auf Wiedersehen
Hard or soft Brexit? It seems that no one can agree on what form the UK’s EU exit could take. With article 50 likely to be triggered in the New Year, the long term effect of the European referendum has yet to materialise. However, the British economy looks to have reversed the pessimistic outlook adopted after the referendum result and has been replaced with cautious optimism and resilience with the UK 100 close to all-time highs. Against a growing background of Euroscepticism across Europe, will the UK’s industry leading companies continue their impressive form?
US Raise Me Up?
The US Federal Reserve and its interest rate rendezvous. Predictions of multiple rate changes this year were quickly revised after Brexit and now it seems likely we’re set for just one, if any, as Federal Reserve Chairwoman Janet Yellen refuses to rush the raising of the US base interest rate. Good news for financials. Continuing discord amongst Fed members has attributed to multiple swings in the strength of the USD, the denomination of the majority of world commodities. Even if the rates do rise in December, one rate rise in 12 months has left markets looking incredibly strong.
OPEC’s Onerous Oversupply
The global oil glut. The news of a preliminary agreement by members of OPEC to cap daily oil production to between 32.5m and 33m bpd has been welcomed by oil investors. In reflection, however, this amounts to a very small proportion of the cartel’s output being reduced (0.7-2%), while non-OPEC producers, most notably Russia (who are producing at post-Soviet record highs), continue to saturate the market. Following on from these baby steps, can the exporters of the black stuff reach a concrete agreement in November to reduce the barrels rolling off the production line and provide a sustained crude oil price rally their economies and the energy sector craves?
