October 2, 2022
Chicago 12, Melborne City, USA
Finance

Why the Dow plunged more than 1,000 points? Should I wait for stocks to sink lower? Here’s what some pros think.

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What a difference a day makes.

Dow Jones Industrial Average Fresh Percentage Profit Fresh for DJIA,
-3.12%
Since November 9, 2020, the S&P 500 has become a blue-chip index with the rest of the stock market, including the SPX.
-3.56%
And Nasdaq composite comp,
-4.99%.

Even US Treasurys were not safe, including the 10-year Treasury note TMUBMUSD10Y.
3.075%
Prices are rising above 3% as they fall.

Some experts have blamed Wednesday’s rally on Federal Reserve Chairman Jerome Powell in a statement saying the 75-basis-point increase was not being actively considered by central bank policymakers at the upcoming meeting.

The remarks came after the Fed raised interest rates by the first half-percentage-point on Wednesday, as widely expected, in the last months of President Bill Clinton’s second term since 2000.

The Fed has raised rates to deal with a surge in inflation that was implemented after the COVID-19 shutdown and displacement, and which has been exacerbated by the bloody conflict in Ukraine since the Russian invasion in late February.

Some industry observers are partly fearing Thursday’s sell-off that inflation will continue to dog the economy in the United States and elsewhere in the world.

Thursday’s data showed that productivity of American workers and businesses fell to 7.5% year-on-year in the first quarter, marking the largest decline since 1947 between supply deficits and production disruptions.

“This was a push for our 2020 roar of growth in a technology-led productivity growth that offsets chronic labor shortages,” according to Yardney Research, a marketwatch contributor and global investment strategy provider founded by Ed Yardney.

Meanwhile, Greg Basuk, CEO of AXS Investments in New York, said the day’s action “reflects the continuation of the 2022 high volatility market roller coaster, this session’s strong spiral erasing yesterday’s gains.”

“Investors are selling today because of new concerns about the uncertainty,” Basuk told MarketWatch.

The AXS CEO pointed to tensions with China, Russia’s blockade of Ukraine as well as a mixed bag of corporate income and worrying concerns about COVID-19 that could hinder a stronger recovery in various parts of the world.

Views: China-centric ETFs sink as Blinken allegedly plans to confirm that China is the main rival of the United States.

Recession fears and inflation concerns are the focus of the current recession on Wall Street. “There is no doubt that inflation, rising rates and volatility will continue to characterize the market environment. [the second quarter] And beyond that, ”Basuk said.

“What’s really interesting about these markets is that these day-to-day changes are happening in both directions, where investors are aggressively bullish, or aggressively devalue the next day,” said Sylvia Jablanski, chief executive and chief investment officer at Defense ETF New York.

Indeed, Bill Watts of MarketWatch writes that, excluding 2020, the S&P 500 has already peaked or is on track to surpass the annual total of 2% – or greater – for each year in 2011.

Read: A roughly 4 months for stocks: The S&P 500 book is the worst start of a year since 1939. Here the professionals say what you should do now

There is still room for hope, Jabalonsky said.

“Inflation may be at its peak, growth may be slow, but it is still positive. Consumers are still spending, [and] Employment is at an all-time high, ”he said.

Market Extra (July 2021): US wealth increased by $ 19 trillion during the epidemic – but mostly for the very rich

The volatile state of the market is creating confusion about the outlook. Should stocks jump in this time, or should investors wait for a better entry point? Or should we heed the advice of billionaire investor Paul Tudor Jones and keep the traditional markets completely clean?

History has shown that you cannot market time and in the long run, the market wins. The big question is what is your deadline, what is your tolerance for pain?

The recession of bonds, rising yields as prices have fallen, is complicating matters for some investors. Treasury, especially the benchmark 10-year U.S. government bond TMUBMUSD10Y,
3.075%,
Traditionally seen as a haven in times of uncertainty, but they have also been scrapped due to the Fed’s current rate-raising plan, which has led to a sell-off in bonds in hopes of a richer yield.

Also read: “The long bull market in Bond is over,” said Scott Maynard of Guggenheim

And check out: Bank of England’s alarming economic forecast boosts dollar prices as investors sell treasury, stock

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