Examining The Status Of The Market And Impact Of A Fed Rate Hike

canstockphoto33392080As of late, the markets been experiencing intense volatility. An array of different variables has caused investors to second guess themselves and their bids. Not only have investors been forced to keep an eye on the economy and consumer spending, but also they’ve been forced to contend with the Fed’s consistent intention of raising interest rates. This has undoubtedly spooked investors and some stocks has experienced a selloff, as a result. Depending on your specific investments, you may find that a rate hike will prove to be advantageous. However, many sectors will experience turmoil, if the Fed does follow through with the decision.

The energy and industrial sectors will most likely be hit hard by this change. However, it is important to remember that the Fed is attempting to reenergize the economy. If they’re successful able to do that, it’ll pay off in the long run. According to the Fed’s April minutes, the intention is to increase the rate in June. Of course, this has been stated previously only for the group to back down at the last minute. According to the group at Sand Storm Holding, a rate hike is unlikely, but investors should prepare themselves regardless. This is true, because the Fed intends to raise the rate and they’ll most likely do so sooner or later.

Another major change that investors cannot ignore is the price of crude oil. Over the course of several months, crude oil prices have managed to sink to new lows only to climb to yearly heights. In fact, the experts agree that the oil market has shifted into a deficit much quicker than they initially expected. This could very well continue into the remainder of the year and is expected to push the price of crude oil up to $50 or more, by the middle of 2016. This will deliver a sigh of relief to United States oil companies, which have been hit hard by the downturn. Recently, it was concluded that the rate of United States oil bankruptcies had increased by almost four hundred percent.

The increasing prices may very well keep a few starving companies fed for a bit longer than original forecasted. Another thing the investor needs to watch is the ongoing release of earning reports from various corporations. Thus far, earning reports have been a mixed bag, with Apple disappointing and Amazon surprising. Just today, L Brands, which owns Victoria’s Secret and several other retail chains, has cut their earnings guidance, while warning of a decline in sales. Since the beginning of the year, the company’s stock has plummeted over 33% and it’ll likely sink further with the revelation.

The good news is that the future isn’t entirely bleak. A few companies, such as HCP Inc., Wal-Mart, and Home Depot, have actually be able to pull off the impossible and generate surprise revenue during the first quarter of the year. So, there are definitely some excellent investment opportunities out there, but investors will need to look much harder in order to find them. Facebook has proven time and again the be a great grower. The company has managed to surprise in terms of growth rate, despite facing added competition from Twitter and other online groups. During the first quarter of 2016, the company grew in all aspects. They boosted user numbers and generated a little over 1.8 million dollars in free cash flow. Suffice to say, they outperformed all expectations set forth by analysts.

With the current market and the company’s inability to break into some key foreign markets, they may have difficulty trying to maintain their accelerated rate of growth. Nonetheless, the company has proven to be far more viable than its 140-character little brother, Twitter. In fact, during the first quarter of 2016, Facebook managed to exceed the growth rate of Netflix, Twitter, and LinkedIn. Can the company grow even more? With their foray into VR gaming and other new technology, investors may very well want to take note and add Facebook to their investment portfolio.