If the last few trading sessions were any indicators, Volatility would be the new normal for the next few weeks. While the markets cannot be timed perfectly, a near term outlook on events that can transpire go a long way in helping your trading/Investment strategy.
Key events that can completely flip your trading P/L ;
Upcoming US Elections – A clear Democratic win is anticipated to cause a small correction as Biden is expected to raise taxes going ahead. These US elections are important as they may mark a change in Foreign/Trade policy going ahead. Historically speaking, Asian equities have always done better post US elections. Volatility
There is also a real risk of Mr. Trump refusing to cede the presidency. Any such unpleasant event can wreak havoc in the markets.
Another Round of US stimulus – Don’t Fight the Fed, especially when a 2.4 Trillion $ package is in the making. This sort of increase in the money supply can counter any dip in the markets. Such a liquidity rush is unprecedented and can take the markets to much higher levels.
FDA meeting in late October – The FDA is expected to evaluate and announce all the data from the Phase 3 trials. It would be the first indication whether the market is set for a V shaped recovery that it is pricing in.
Fiscal Stimulus in India – The govt is expected to announce another round of measures to help the economy. A massive push on spending or cash transfers would help a long way In keeping the cheer alive on D Street.
