Monday, December 22, 2014

Green Stock Outlook Post Santa Claus Rally

While markets have been generous once again this Christmas, there are some dark clouds on the horizon for green investors.

Almost ever year Wall Street enjoys a "Santa Claus Rally" and this commonly includes green stock. This year, as markets fell in December, investors where wondering whether bearish sentiments were going to deny them a Christmas rally.

Although it came late, the rally did come. The Dow Jones Sustainability World Index Composite plunged in December, only to rebound as Christmas drew near. This follows the movement of broader market trends including both the Dow Jones Industrial Average (DJIA) and the S&P 500 which rebounded starting on Wednesday December 17 and extending into Friday December 19.

The markets appeared to respond to the Fed and the FOMC meeting on Wednesday December 17. After the meeting, the Chair of the Board of Governors of the Federal Reserve System, Janet Yellen said in a press conference that the decline in oil prices "will likely hold down overall inflation in the near term." She went on to comment on interest rates saying, "Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy."

The fundamentals of clean energy stocks remain sound as they follow wider market trends reinforcing the commonly the commonly held notion that, "a rising tide floats all boats."

However, the combination of falling oil prices, global economic weakness, and the Republicans' win in the US midterms give green investors cause for concern particularly those who own clean energy.

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