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Thread: Stock Market dip

  1. #1
    Join Date
    Sep 2013
    Northern England, UK

    Stock Market dip

    So there's been a dip in the stock market, starting in the DOW Jones and wiping out 2/3rds of the growth of 2017 and now carrying on through the Asian and European Markets. I read this good, short paragraph summary of what is going on with it.

    'The softness of markets over the last few days is down to one thing.

    As monetary policy begins its long journey away from the trillions of pounds of stimulus pumped into the system to keep the economic ship from the rocks, shareholders are beginning to wonder how much of their investments are in companies with strong fundamentals.

    And how much is simply holding up an asset bubble - frothy prices led ever higher in an era of ultra low interest rates and cheap money. Fingers are hovering over the "sell" button. And once investors start looking at their portfolio and selling out of the froth, automatic algorithmic trading tends to "chase the dip"'.


  2. #2
    It's back to where it was.

    Here's a excerpt from a tax guy I know. I freaked out because I have a lot of money in stocks and like an over-reacting cry baby starting calling and emailing him like an idiot.

    We got a reading of wage inflation in the latest jobs report, which was roughly 2.9 percent. That was the highest it’s been in a very long time. So this led the computers to change their expectations for future inflation. Basically, the computers calculated that even higher inflation is inevitable, and therefore they expect the Federal Reserve to raise interest rates more rapidly. And the spike in sellers reflected that. We just passed a massive deficit-financed tax cut last month, which from a business cycle point of view comes at a crazy point in time. The US economy is operating at full capacity, in my opinion, and then we get this huge tax cut, which is like another shot of adrenaline to the economy. That can only drive inflation even higher. Don't panic. Fundamentally, the number that we got with the 2.9 percent wage increase is good news. But it does signal that perhaps the period of extraordinarily low interest rates and low inflation levels that we’ve had since 2008 is over. And stock markets and other financial markets will need to adjust to that.

    I knew the record growth was due for a market correction (pun intended) sooner or later, but the massive drop in a fucking day made me piss myself.

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