The experts of Goldman Sachs say there is a 30% probability of the worst-case scenario in the US economy. It appears that most Wall Street players share the opinion that the failure to raise the US debt ceiling may result in devastating consequences of the entire global economy, more serious problems that those that may be caused by the temporary delay in financing the US government.
In this aspect, traders and investors ask the same question: What will be the reaction of the US and Russian technological sectors represented by Google, AO, Facebook, Yandex and other stocks. Let’s try to ponder on this question together with Masterforex-V Academy and Market Leader experts…
Leading Dotcoms
At this point, there are two dotcoms that stand out from the crowd in terms of financial performance. These are Facebook and Yandex. It is these stocks that have been showing the highest yields over the last couple of months (+90% and +70% respectively since early 2013).
The 3rd best performer is Yahoo! Still, Facebook and Yandex showed a strong start after lagging behind their rivals for some time.
In May 2013, Masterforex-V Academy added Facebook Inc (NASDAQ:FB) to its dotcom portfolio since the experts had predicted a strong rally in the market of Facebook’s stock. They were right. After another quarterly report published by Facebook in July 2013, the price literary skyrocketed.
Investors still enjoy the rally shown by Facebook’s stock. At this point, the price is nearly 100% up!
The diagram above (to the left of the chart, you can see the dynamics of its redistribution in the overall dotcom portfolio) shows that Facebook’s stock used to account for 2% of the portfolio. Now the figures are up to 15% since Facebook has ousted AOL and Google a little bit.
At the same time, Yandex NV (NASDAQ:YNDX) can see its stock rallying after a strong start in July 2013. At this point, the stock is up by 35%. The stock used to occupy only 1% of the overall portfolio while the current exposure is 28%! At the same time, Google’s share in the dotcom portfolio has been diminished from 34% down to 5%.
According to Igor Vasev, Chief of the Stock trading Department of Masterforex-V Academy, such asset rotation (redistribution) inside the portfolio (according to the Market Plus strategy) makes it possible to track the leaders in the market segment, thereby giving 100% moneymaking opportunities.
For example, if the experts had avoided rotation/redistribution of asset shares (Yahoo!, Google, Yandex, AOL Inc и Facebook Inc.) inside the portfolio, they would now have only +35% while the Market Plus strategy allowed them to gain as much as +81% instead of 35%!!!
Stock Markets Amid US Debt Ceiling Issue
American stock indices are showing positive dynamics amid expectations that public agencies will resume work in the short run as the debt ceiling and budget talks are nearing a resolution.
Needless to say that financial markets around the globe (especially emerging markets) have been volatile over the last couple of weeks. One of the major reasons is the uncertainty over the Fed’s intension to taper the bond purchase program in the near future. If the tapering does take place, the markets will lack the monetary stimuli. Others are concerned that the Fed’s policies promote the flight of capital form the US market to emerging markets with higher yields.
Such a situation is dangerous for emerging markets since it stimulates excessive lending and spending caused by stronger economies. When the Fed does eventually taper the QE program, the money stream will reverse back to the USA, causing major problems to those addicted emerging economies.
