Concerns about the Global Economy

CONCERNS ABOUT THE GLOBAL
ECONOMY
By www.ProfitableTradingTips.com

Stock trading volume is at its highest
in three years.
http://profitabletradingtips.com/trading-investing/concerns-about-the-global-economy

Concerns about the global economy
have set the market back a few
percent.

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Portfolio managers typically buy and
sell at the end of the year to take
profits, rid themselves of losers and
generally prepare for the New Year.

will drive a lot of these portfolio-adjustment
trades.

The wall street journal online
source, moneybeat, notes that stock
trading is back, for now.

Halfway through this month the
average number of stocks changing
hands each day stands at its highest
level for the month of november
since 2011, according to data from
credit suisse.

On average, 6.6 billion shares have
traded each day this month, an 11%
increase from november last year.

volumes collapsed this summer to
their lowest levels since the financial
crisis, as investors bided their time
before the fed ended quantitative
easing in october and any concerns
about global growth were on the
back burner.

but november’s increase in trading
volume comes on the heels of an
even busier october.

concerns about the global economy
last month pushed the s&p 500
down by as much as 7.4%

and sent volatility, a key driver of
volumes, soaring. trading volumes
surged 25% to 7.8 billion shares a
day.

volumes typically rise in the fourth
quarter, as portfolio managers fine
tune their positions before closing
their books for the year.

For stock traders, increased trading
volume, coupled with concerns
about the market are potential
factors for profit.

The VIX fear index is up to 26.25
compared to a low of 10.32 in July.

The world has been making its way,
bit by bit, out of the recession.

First Asian markets took the lead
and then North America.

Now there are signs of economic
slowdown and risk of outright
recession in Japan, China and
Europe.

US manufacturing is off for the first
time in months.

The bright light in the USA is the low
price of energy but the glut of lower
priced gas and oil has send oil stock
downward.

simply increase the likelihood that
gas and oil prices will stay low for
some time to come.

Japanese Recession

After more than two decades fighting
deflation things were starting to look
so good in Japan.

The government had succeeded in
devaluing the Yen and increasing
exports.

Then they decided to institute a
consumption tax.

Japan is back in recession for the
fourth time in only six years.
According to the washington post:

a sharp slowdown in asia and
stagnation in europe are putting the
global economy at risk of a
prolonged slump, economists say

marked in places by sky-high
unemployment, sluggish wage
growth and some of the worst
economic conditions in decades.

as noted in the washington post a
japan recession on top of trouble in
europe is concerning both
economists and investors.

on monday, japan said it had entered
its fourth recession in six years - this
one despite aggressive efforts by
prime minister shinzo abe to boost
growth.

Investors might choose to look
elsewhere as Japan’s economic
problems worsen but stock traders
may find profits from Japan’s on
again off again brushes with
economic growth between surges of
economic activity.

Specifics: Airline Stocks

Traders may have concerns about
the global economy but are more
focused on stock price movement,
up or down.

Airline stocks provide an interesting
mix of signals.

24/7 wall street asks if airline stocks
have rallied too much now that fuel
prices are down.

falling oil prices over the past month
have made a huge contribution to
the major airliners’ stock prices.

the impact of lower oil prices and the
continued strong consumer demand
almost certainly add support to the
bottom line.

the logic behind the massive gains in
airline shares is that as oil costs
shrink, airlines should see their
margins increase and earnings grow
from there.

that being said, the runs have been
so strong over the past month or so
that one question has to be asked:
have these airline stocks all run up
too much?

Low fuel prices are good for airlines
but concerns about the global
economy include the fact that a
broader recession will decrease the
number of people who want to fly.

There are a lot of recent orders out
there for jets for Asia.

These orders could be canceled if
the economy tanks.

Concerns about the Global Economy

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Concerns about the Global Economy