It’s the holiday season. The economy is the best its been in over a decade. So what’s got the stock market so down? To make a holiday cocktail as strong as our current volatility, you’d need several key ingredients. The bartender would add two shots of Federal Reserve — way more than needed. A shot of China trade. A few splashes of oil and a dash of expected economic moderation. You garnish that tall glass with Twitter and the media crowd ramping up the political negativity with faux economic “expertise.” That’s a too strong and bitter holiday nog. Falling oil prices historically have been a sign of global weakness. The difference now is that America is a net exporter of oil; it had not been before. The China tariff tiff is a failure to communicate effectively. The news was clearly good coming out of the G-20, but that message was garbled in every way possible. Solid communications could have spared 800 points on the Dow Jones index. Coming off … [Read more...] about Bad communication is why the stock market has been so down
Why china stock market is falling
The stock market got creamed again Monday, with the Dow Jones industrial average falling 395.78 points to 25,017.44. The decline comes after a couple of solid gains during trading last week. I want to remind you of something I’ve been saying for a long time. Traders push stock prices higher on options expiration weeks. And last week was one of those times. But once expiration week ends there is no prop under the market. So you get days like Monday. People who write about this stuff will come up with reasons for big declines — like the trade talks between China and the US going badly. The truth, however, is that last week’s fake rally set the market up for Monday’s drubbing. I’m afraid I have been wrong about bitcoin. I thought the fake “currency” would be worthless by the end of this year. It’ll probably take another year before the price drops to zero. On Monday, bitcoin’s price dropped below $5,000. Why? No reason — except … [Read more...] about Why the stock market has taken a hit lately
Adam Shell USA TODAY Published 6:40 PM EDT Oct 10, 2018 It sure felt like a sell-everything day on Wall Street: Stock prices plunged, and talk of a panic and comeuppance for the nearly 10-year old bull market took hold. So why did stock prices fall so far, so fast, seemingly out of nowhere? And what explains the 832-point drop for the Dow Jones industrial average just a week after the blue-chip stock gauge notched a record high? While there's never a perfect answer to explain how market psychology can turn on a dime, here's how financial pros are making sense of the worst day for the Dow since February, and a big decline in popular technology stocks. What sparked the fall? Nervousness had been building for days on Wall Street. The catalyst was the recent spike in the yield on a closely watched government bond to a seven-year high. The 10-year Treasury note -- whose key rate impacts the pricing on things ranging from fixed-rate mortgages to stocks to virtually every financial … [Read more...] about Why did stock market drop so much today?
Adam Shell USA TODAY Published 8:41 AM EDT Sep 10, 2018 Too much good news about the economy could be bad news for markets and your 401(k). It sounds counterintuitive, but history shows that when stocks and a slew of economic signals are at or near peak levels, financial markets are more vulnerable. The risk for stocks, which hit fresh highs in late August, is this: If the economy can't keep up its heady pace and business headlines turn less positive, disappointed investors could sell shares and send the market lower. Heady times At the moment, things sure are heady. On Friday, the government said hourly wage growth rose at its fastest pace since 2009 and the unemployment rate held at an 18-year low. That extends a trend of strong economic reports, with numbers coming in at their best levels in years. Consumer confidence is the highest since 2000. Small-business owners are the most optimistic they've been in 35 years. Profits of … [Read more...] about 401(k) investors: Stock market record, strong economy stir ‘peak’ fear
Italy's populists didn't just wrest control of their own government, they've hijacked Federal Reserve monetary policy too. X As long as Italy's membership in the eurozone looks about as secure as the Leaning Tower of Pisa, central bankers are going to be much more hesitant to hike interest rates or otherwise tighten policy. Don't Bet On Aggressive Fed, ECB As the Italian political crisis erupted and global financial markets plunged Tuesday, Fed rate-hike expectations took a dive. Just over a week ago, markets were pricing in roughly 50-50 odds of four Fed rate hikes in 2018. But during the worst of yesterday's rout, odds of just two Fed hikes spiked close to 50%. With panic subsiding Wednesday as stock and bond markets rebounded, odds firmed for three hikes this year, according to the CME Group FedWatch tool. But more volatility is likely with any flare-up in Italy's political risks. IBD Newsletters Get exclusive IBD analysis and action news daily. SIGN UP NOW! IBD … [Read more...] about Italy’s Populists Just Took Over The Fed — And The Stock Market Is OK With That