Financial Markets in 2016: Volatility and Pains?


(B) The major U.S. stock market indexes closed out this week with losses of nearly 6% or more as concerns about China and a global economic slowdown is persisting. And those indexes, DJIA, S&P 500, Nasdaq 100, are now starting to challenge a 10% market correction from the highs in 2015. The S&P 500 is now valued at 15.7 times earnings.

Last year, the global financial markets were struggling between two opposite forces: the Federal Reserve’s determination to raise interest rates as the U.S. job market strengthened; and the rest of the world as China’s economic growth slowed and commodity prices have been in free fall.

In the final months of 2015, there has been a slowdown in venture capital investments into tech startups. As a consequence, valuation multiples of Silicon Valley Unicorns are likely to decline, to be more in sync, with those of public tech companies that have already significantly declined.

2016 is likely to be volatile for the financial markets.


Note: The picture above is from NYC.

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Categories: Financial Markets