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?
Why china stock market is falling
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
Last Updated Sep 22, 2011 2:15 PM EDT The sky -- uh, I mean the stock market -- is falling. Blame Operation Twist. Blame Republicans. Blame President Obama. Blame Wall Street. Blame the obviously end-time fascination with "X Factor." Let's see, who did we forget? Oh yeah -- blame you, me and all the other consumers nervously eyeing their bank balances rather than high-tailing it to the mall. Global investors once again turned their lonely eyes to Federal Reserve chief Ben Bernanke yesterday and came away disappointed. One theory is that the central bank's grim economic prognosis overshadowed its move to ratchet down long-term interest rates. Plausible. But what, exactly, did the ever horizon-scanning markets learn from the Fed yesterday that they didn't already know? High unemployment, check. Weak household spending, check. Significant downside risks, check. And since we're on the topic, Europe is still burning, Washington is still frozen and China won't soar forever. Surprise! Today … [Read more...] about Panic Sell: Why Are Global Stock Markets Tanking?
Chinese stocks plunged Monday after the country's securities regulator rapped three major brokerages for continuing to lend money for stock purchases in violation of rules. As punishment for extending so called "margin trading" contracts, the brokerages are forbidden to offer credit to new customers for three months. How much did shares fall? At one point Monday, the Shanghai Composite Index was down 8.3 percent. It later trimmed that to a loss of 7.7 percent. Share prices of brokerages were hardest hit, with some falling by the daily loss limit of 10 percent. Despite the sharp fall, the Shanghai Composite Index is still up 55 percent in the past 12 months and up 33 percent for the past three months. Why did the market fall so much? Investors and analysts see the penalties against the brokerages as foreshadowing more curbs on credit-financed trading by China's government. Authorities want to stop the stock market's boom over the past year from turning into a bubble that could … [Read more...] about Why China’s stock market plunged 8 percent