Market Scenario Analysis

The health of the current U.S. economy appears to be growing gradually. The second quarter real GDP growth was 3.7% and the unemployment rate declined to 5.3%. The U.S Federal Reserve (Fed) is expected to raise interest rates in the near future when it sees clear signs of strong economic growth and improvements in the job market.

The recent job growth is impressive with an increase in 3.4% though the unemployment rate is still at 10% (U.S. average is 5.2%). With this recent increase, there is

The United States is the leading economy across the globe and experienced several tribulations in the recent past following the 2008 global recession. Despite these recent challenges, there are expectations among policymakers and financial experts that the country will experience solid economic growth. Actually, financial analysts have stated that the U.S. economy will be characterized by increased consumer spending, increased investments by businesses, reduced rate of unemployment, and reduction in government cut. Some analysts have also stated that the country’s economy will strengthen in 2014 with an average of 2.7 percent or more. However, these predictions can only be understood through an analysis of the current macroeconomic

• As previously stated in the executive summary, the United States’ economy is currently stagnating. From week to week we may see a rise in one indicator while there is a fall in another indicator, but none of the rises or falls are drastic enough to have an overwhelming impact on the economy as a whole. Although the economy is not near as strong as it was before the 2008-2009 recession, arguably one of the biggest economic crises of the past decade, there has been much growth and strength throughout the past few years with this year being the first year in which the economy is in somewhat of a holding pattern. I believe, that even with the little growth and movement of the United States economy over the past year, it is still perhaps one of the strongest economies in the world at the moment.

In this paper, you will read about the current standing of the U.S. economy as of spring and summer for 2015. Gross Domestic Product (GDP), unemployment rate, inflation rate, foreign trade, consumer spending, business investment, and government spending will all be analyzed. This analysis will then lead to the projection of the U.S. economy for the first two quarters of 2016.

Over the past couple of years we have seen a huge surge in stock markets (Chart#1). The main reason for such moves is Quantitative Easing monetary policy provided by Federal Reserve System since late 2008. Purchases were halted on 29 October 2014 after accumulating $4.5 trillion in assets or 26% of GDP. The key outlook is tend to be consumer behavior, because households’ spending represents two thirds of GDP, which is broadest measure of economic activity. The job market is considerably stronger right now. Since June last year, payroll employments expanded by $2.2 million jobs (Chart#2), which represents 2.4 percent annual rate of increase. As a result, incomes are rising rapidly. For the same period real

Companies use price elasticity as a tool to identify the overall change in supply or demand of a product compared to the movement of price. When deciding to market a new product like The Globe, we discussed what the price should be. We use elasticity of demand to determine whether our profits will go up or down if we set a lower price than the current price of the Roku. Since there are other possible alternatives for our consumers to choose from when it comes to streaming devices, it is very important that our product meet the needs of our potential buyers.

The latest FOMC statement indicates that the economy is expanding at a constant pace, with increases in employment alongside GDP growth. The US economy expanded more than expected in the third quarter of 2014, with real GDP increased 3.9 percent, surpassing the forecasted 3.5 percent, despite slowing down from a 4.6 percent increase in the previous quarter. The increase in real GDP was contributed by higher than expected increases in consumption, investment, government spending, and net exports ("News Release: Gross Domestic Product"). Unemployment has continued to decrease for the third consecutive month in October, with a drop from 5.9 percent to 5.8 percent, the lowest in the past 6 years since its 10 percent peak in 2009 ("Employment Situation Summary"). However, the rate is still below 4.7 percent before the recession. According to the National association for Business Economics, Real GDP is forecasted to expand further, and the unemployment rate is expected to fall to 5.4 percent by the end of 2015 ("NABE - NABE Outlook December

The upcoming presidential election in the US has been making the stock market very volatile. The investors are scared that, if Donald Trump becomes the next president, it will affect the business investments, which in result may put the economy in a recession. His policies for deporting 11 million immigrants, building a wall and starting wars with other countries are some of the few reasons as to why many economists believe that the US economy would shrink by 1 trillion dollars over five years; also, they believe that his policies will destroy 4 million US jobs. This unpredictability of who is going to win the election is making the investors very cautious. This is referred to as the “fear gauge” on the Wall Street. The S&P 500, which is the

In September of 2014, there was America’s first diagnosis of Ebola in Texas, spiking alarm throughout the country. Many people were afraid they would get Ebola, and some people even decided to take extreme precaution. That’s where Lakeland Industries comes into the picture. Because of the large amounts of hazmat suits being bought from Lakeland, the stock price began to increase. The price of the stock started at $3.62, but boosted up to $15.32, about a thirty percent gain that shows just how much of an affect the Ebola scare had on the stock price. Before, the price of Lakeland Industries had been consistently low, ranging from $5 to $7, but as people became more aware of the threat of Ebola going into October the stock price got all the way up to $29. This spike in price increase isn’t caused by just the company itself, but the fear of Ebola in investors. This is shown by the price of Lakeland Industries hitting “a high of $29 earlier in the month before quickly crashing below the $15 level” after people realized that Ebola would not affect them and the need for hazmat suits quickly diminished. Because of the Ebola scare, the stock price of Lakeland Industries surged, but it would not last because of the people understanding that the likeliness of an Ebola outbreak is slim. This event is the foremost reason for the price of Lakeland Industries’ (LAKE) quick rise to the top.

With the recent election of Donald J. Trump as president of the United States has also come with it changes in the stock market. One stock in particular that has benefited from this result is Caterpillar. Many of the plains outlined in Trumps campaign included improvements to infrastructure, less regulations on mining and energy production, and the wall that is said to be constructed along the U.S Mexico border. This has caused an increased interest in this company as its products or products similar to these products will be required in the construction of these projects. In anticipation for these projects investors have responded by purchasing Caterpillar stock. It appears as though investors believe that it is indeed a good time to own stock

Moreover, with this extra cash and optimism, consumers will invest enormously. The stock market will reach record breaking highs. The stock market is a clear economic indicator of how well the U.S economy is doing and enhances economic growth in and of

Furthermore, there is a decent chance of an upside surprise to 2014 growth. Rational investor’s investments, spending and confidence are still below than the expected level what would be considered normal levels by the standards of past economic expansions. As the job growth becomes strong and consumers feel more protected then a righteous way of spending is getting better, more consumer income begetting more spending could be initiated. If this occurs rapidly then the quarterly growth is likely to exceed an annually at the rate of 3%. But if this does not happens in 2014 than it is nevertheless very likely to happen before the end of 2015. (Payne, 2014)

H1: the holiday effects will be more pronounced for stocks listed in US exchanges only compare to cross-listing stocks.

The US development will be a positive astonishment in 2016. We trust that worldwide value markets have gone sufficiently far to reuse chance, and the likelihood of subsidence is much lower than the market desires. Truth be told, we believe that because of a noteworthy diminishment in 2016, US development will be astonished in view of financial specialists' desires. We keep up that worldwide development will be quieted, however positive When oil still tries to discover at the base, we trust that vitality markets will be solidified from mid-to-late