In the midst of the holiday season, when a big chunk of investors is at or thinking of sunny beaches, the market faces a few important tugs of wars, capable of conditioning the economic medium-term outcome of the biggest players in the world. Some are deeply connected, like the trade war and the FED monetary policy, others are inevitable consequences of the commercial litigation between the two biggest economies, such as the cooling of the Euro area conditions, mainly due to the German economic soft patch.
There are also some macro factors, like politics, namely the 2020 U.S presidential election and the new Brexit deadline in three months. In the market, big opposing forces are at a clash, valuation is a worry, Wall Street is at new record highs levels after a ten-year climb, but profits are not going along the same path, so eventually the rope will break, regardless of the liquidity bubble that central banks keep inflating. In the end the first rule of making money is not to lose it, meaning investing with a clear notion of the best time frame and leverage, to not get caught holding a bag of hyper-valued assets.
Photo by Marco Oriolesi.
