As the summer are here and heating us all up, most stock exchanges are performing well. On the continent, many indices are soaring to new highs. Particularly, a mild winter has slightly boosted prospects. Gas prices are now at levels not seen since dictator Putin began his saber-rattling. We have to go back to the summer of 2021 to see similar prices. We also see new hope in the heavy and power-intensive European industry, especially in populous Germany. Despite Europe's largest economy technically being in a recession when considering GDP as a whole, there is also low unemployment in Germany. In the US, the "world's most important stock index," the S&P 500, has risen steadily in double digits since the beginning of the year, more specifically up 17.5% YTD (Year to Date).
Source: INFRONT
Most of the increase can be attributed to a handful of IT giants, giants that are propelled by the expectations of artificial intelligence. Many investors see technology as a paradigm shift that has the potential to drive further stock market development for a long time. The fact that gas prices have returned to more normal levels is also good for the global economy. Contributions are also coming from slightly lower prices for fertilizer and aluminum products, as well as an oil price that has fallen nearly 40 percent in one year. Companies, in general, are making good profits, both in Norway where I reside and in other European countries. Raw material prices are also holding up well, but at the same time, China's reopening could potentially push many commodity prices even higher. The activity in the "Middle Kingdom" can also define the course of most shipping stocks, so it may be worth keeping an eye on whether a reopening will take place in China quite soon. It will happen; we just have to be patient.
The global holiday season has started off well, with both trading volumes and price fluctuations usually subdued in July. And as it stands now, macroeconomic figures often exceed our expectations, both in Europe and the US. At the same time, the US, being the world's most powerful central bank, may be at or near the peak interest rate. Inflation is also diminishing in many parts of the world, although not yet in Scandinavia, which puts a strain on the wallets of those who rely on earned income... Inflation remains high, creating uncertainty in thousands of households. The consequences of the significant interest rate hikes after the pandemic may resurface, and to be completely honest, I believe we can expect a downturn in stocks and real estate in the near future, while the rise in cryptocurrencies will intensify and become stronger than ever. Investors have a lot to consider in a year that is far from being finalized.
Thank you for reading my blog post. This blogpost should not be considered financial advice or the like but rather as an informative overview of the recent economic situation in the world. If you enjoy what I write about, feel free to upvote, like, or follow me for more similar content. I also write about money, crypto games, and projects created on the Hive Blockchain.