4 Forecasts of the future of the stock market

According to Tejarat News, statistics show that in the four working days of this week, despite the growth of more than five percent of US banknotes, the total stock index has fallen behind by 0.18 percent. The homogeneous indicator, which shows a more realistic view of the stock market, has fallen by 1.7 percent and the outflow of real capital from the stock trading has continued.

Convergence of the dollar and the stock market is not always simultaneous

Hossam Hosseini, Capital Market Expert

This has happened historically and there have been periods when the dollar has risen, but the stock market has stagnated. This was the case until mid-1991, and despite the growth of the dollar, the overall stock market index did not grow, but the point was that all of this was in the early stages of the dollar’s growth; That is, it had just started a big uptrend, and the rest of the assets were not included, but gradually moved in and out.

Usually in the middle of the dollar growth cycle, all markets converge with the growth of the dollar, but at this point this has not yet happened and the dollar and the stock market have not converged.

One reason for this could be market pessimism about the continued growth of the dollar; That is, they see this growth as temporary growth and expect the nuclear deal to eventually take shape and the dollar to reach lower prices. Of course, it is unlikely that market participants will expect the dollar to rise below current levels with the nuclear deal, no matter how high it rises, and there is no general consensus on the evidence. Although some have this view, they are in the minority, not the majority, who want to influence market trends.

The next and more logical reason for this is the government’s contractionary policies. Contractionary policies have stagnated in all assets, and we see that other assets are not growing at the same pace as the dollar; That is, real estate and other markets have not grown as fast as the dollar. In the case of the capital market, this has even happened in the opposite direction, which is surprising. The rest of the markets, real estate and cars, did not fully agree with the dollar and grew at a slower pace, but the stock market was completely reversed and acted negatively.

Of course, this relationship will be severed from somewhere; If the dollar continues to grow, it will be cut off. If the fear of the market disappears, we will see the growth of the stock market.

Dollar growth signal for the stock market

Mohammad Nourbakhsh, Capital Market Expert

Now the dollar and the stock market are not in the same direction. One should not look at just one variable to analyze this. As soon as the outcome of the negotiations to revive Borjam is still uncertain, it is a signal for the growth of the dollar and we see that the price of the dollar has exceeded 30,000 tomans.

But it will also pose a major risk to the market, which is the government’s budget deficit. Part of the government’s budget deficit must be financed by companies, and the government has no choice but to do so. The market is now more concerned that this excessive budget deficit will be financed by companies. It seems that if the dollar continues its growing trend (which we expect to continue) and the state of the government budget is determined, the stock market will also start its upward trend.

Therefore, all factors must be seen together. The negative signal of the negotiations has now raised concerns about the budget deficit, which is a wake-up call for companies. But this will not hinder market growth in the long run, or at least in the medium term. After a while, if the dollar continues to grow, the capital market will start to grow, and there is no doubt about that.

Investors look to the next round of nuclear talks

Mehdi Sasani, Capital Market Expert

Usually when the dollar grows, the overall stock market index also grows and converges. But during this period, despite the growth of the dollar, the growth of the stock market index has been divergent with the dollar.

Of course, it should be noted that the stock market and the dollar do not always converge at the same time, and sometimes there is a time lag. At times we saw the stock market rise, but the dollar fell or vice versa; That is, the growth of the dollar has been upward, but the overall stock market index has remained in place and after a while has adapted to the growth of the dollar; That is, the dollar and the stock market did not necessarily rise at the same time and converged over time. This has already happened, and on the other hand, some expect the dollar to depreciate.

If this happens, the market is justified, but if the dollar does not return and continues to grow, the whole stock market index will surely lead itself upwards and will be aligned with the dollar.

However, in the current situation, there does not seem to be a chance for the negotiations to succeed; Unless the two negotiating parties shorten their positions in future meetings in the coming weeks and change course and negotiate new issues; That means witnessing a new agreement.

In this case, we can say that we have taken a positive step. But with the current situation, there is no expectation that the negotiations will succeed. At present, there is no positive point in the nuclear negotiations.

Stock market fears of the future

Mehdi Delbari, Capital Market Expert

Unfortunately, in the last four months since the new government took office, it has focused on communicating with the people on provincial trips and improving foreign relations, and has not paid much attention to money laundering, rising bank rates, and budget deficits. Monetary variables are variables that, if left unchecked, can affect all operations. In recent months, we have seen the highest bank interest rates, the highest treasury rates and the highest interbank market rates.

This cycle has been experienced in previous periods as well. Usually, companies and institutions deposit in banks and securities at some point, but when the rate is very high, the risk of keeping securities in banks also increases.

At the same time, the gap between the Nima and the free dollar is currently widening so that there is a possibility of an increase in the exchange rate of the Nima dollar so that it can narrow its gap of 233% with the free dollar. Although the exporter will benefit from this situation, the profit of the importers will gradually decrease and the effects of the increase in the price of the Nima dollar will be reflected in various goods.

Ordering pricing is another barrier to stock return. Contrary to its rhetoric, the government has pursued a policy of suppressing prices while not managing the value of money. Historically, it is usually the interest rate that moves first, then the dollar, then inflation, and then the stock market index. At present, this event also seems to be repeating itself. Interest rates have risen in the past year, then the dollar will rise, and then we will have another growth in commodities, and finally from the increase in corporate sales we can see that corporate profits have increased and the overall index will rise in the same direction. .

The current price-to-earnings ratio of the stock market is currently close to the range of December 1988, but the policy of price suppression, the persistence of the regulatory economy and, of course, the waiting and distrustful atmosphere of the stock market has prevented increased demand in the glass hall.

Source: the world of economy