At the end of 2014, the stock market is leaving us with plenty of cliffhangers to ponder about.
And what happens with a few of the most vital of those cliffhangers will likely decide what path the market takes in the year to come.
Here’s what you should keep an eye on as we move into 2015…
After wading through all the topics surrounding the stock market as this year comes to a close, I’ve narrowed down the most important of them to these 3:
- Will potential European recession drag the US market down with it?
- How will the Fed (interest rates) impact the market?
- What are Washington’s plans & how will they affect the stock market?
Jumping right in, Europe appears to be on the brink of another recession. Reasonable growth seems to be a difficult thing for European nations to attain, even as the European Central Bank could begin quantitative easing.
However, the global economy is expected to grow faster in 2015 than 2014, both years without any help from a slow European economy. I don’t foresee the US market being impacted heavily in this regard, but it’s certainly something to keep an eye on.
The next major circumstance is how the Fed’s use of interest rates will help or hurt the stock market.
The fear is that this will end the current bull market, but I see things slightly differently at the moment.
Although Fed rate hikes are expected in 2015, the market normally responds well to the first round of hikes. So, if the bull ends next year, I don’t expect it to be due solely to the actions of the Fed.
And lastly, Washington’s influence on the market holds plenty of questions…
Will the Affordable Care Act potential changes impact the healthcare sector heavily? What will the new Republican Congress have in store for the economy? How much will the energy policy change?
We simply don’t know the answers to these questions yet.
But what we can be confident of is that these 3 major market situations will go a very long way in determining the market in 2015.
