January closed out just as it started- with extreme volatility. Lower oil prices are hurting Energy Sector profits and because that’s been one of the few sectors indulging in capital investment there has been collateral damage to non-Energy businesses such as steel and heavy equipment.
The stronger US dollar is having the anticipated impact on US exporters and multinationals resulting in negative earnings. The effect is broad based effecting not only the likely blue chips such as P&G, J&J and Caterpillar but also the more resilient Google and Amazon.
It’s a tough time for US stocks, even Apple which reported stellar earnings closed down on Friday.
Overseas markets aren’t faring much better, but that is where I’m moving my portfolio (via US based exchange traded funds). With a few exceptions, I’m investing in the reciprocal of what’s ailing US stocks- foreign nations that export to the US and consume oil.
The volatility will likely continue, invest with caution.
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