Elections and Economic Crisis – What Will Dictate the Markets in the Final Financial Quarter?

by Adam on October 12, 2012

As we enter into the final financial quarter of 2012, we appear to be approaching something of a watershed for the global economy.

The words floating amongst all today’s financial market analysis highlights three significant events that may impact on trading during the coming months, as the potential for heavy and sustained periods of austerity threatens to deter all but the most daring of investors.

 

In specific terms, it is the impending presidential election in the U.S., the federal governments’ fiscal cliff and the continuing eurozone crisis that will make their presence felt over the course of the next six months and beyond. This is creating a complex and diverse series of factors for financial traders to consider, and forcing many to hedge their investments in a period of calm before the inevitable storm.

 

The Financial Market Factors: How Will they Influence Trading?

 

With this in mind, how will these three independent factors impact on the financial market and individual traders? Consider the following: -

 

  • The Presidential Election: As the U.S. Presidential elections reach their long awaited conclusion, the landscape for financial traders is becoming increasingly blurred. The recently televised debate between the two candidates only served to create a heightened sense of caution within the markets, as the race drew ever closer to ensure that predicting a winner is almost impossible. The result will have a significant impact on the performance of the U.S. markets, and many investors are choosing to hedge their assets until there has been a definitive resolution.

 

  • The Eurozone Crisis: The most complex of all the issues currently effecting the financial markets, the eurozone crisis is reaching a critical point in time. With bailout discussions between Germany and Greece continuing, investors are monitoring the situation closely to see whether the Euro can continue to grow and gain strength. As an aside, the IMF (International Monetary Fund) have warned against the implementation of strict austerity measures for nations such as Greece and Spain, as this could damage any potential for future economic recovery.

 

The Fiscal Cliff: Although the U.S. governments fiscal cliff will not make its presence felt until the proposed budget cuts are implemented on the 1st of January, the potential consequences are causing huge trepidation and anxiety among business owners, tax payers and financial traders alike. This is also prompting significant levels of caution among astute traders, as many are looking to consolidate their market position and protect their investment assets whilst trading derivatives in the financial market. With this in mind, the final financial quarter of 2012 could be an extremely nervous time for traders, especially those who have less experience within the market.

 It remains the objective of many investors to seek to find a comprehensive sources of information to open up investment options.

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