Local Business Reporter and columnist, writes about entrepreneurs and businesses in the metropolitan Washington
Thomas Heath Local Business Reporter and columnist, writes about entrepreneurs and businesses in the metropolitan Washington October 23 at 15:00…
US. Markets spent most of the day deep in red at one of the busiest winnings of the year as a global sales fee and a disappointment from 3M – a major industrial company that is a window in the US economy – sent nervous investors out of the shares.
At afternoon trading, all three indices had associated significant early losses. At 3:00 the average Dow Jones average was 50 points or 0.2 percent. Standard & Poor’s 500 stock index was down 0.3 percent, its fourth decline for so many days. The tech-heavy Nasdaq, which has been whacked in recent weeks from sales in the so-called FAANG shares – Facebook, Amazon.com, Apple, Netflix and Alphabet Google, Alphabet – was 0.2 percent.
All three had gone to a three-month decline in volatile trading in the morning.
“Politics and Results,” said Sam Stovall, CFIB’s equity investment strategy for US Equity Strategy. “Both 3M and Caterpillar seem to spin their wheels and show the real effects of global tensions.”
3M and Caterpillar, another benchmark, fell sharply in trade, as companies failed to project robust prospects for the rest of 2018. Caterpillar warned retailers worldwide that it would raise prices due to the growing cost of steel. Companies are closely monitored because they have great international sales and are seen as economic crystal balls.
Ed Yardeni, CEO of Yardeni Research, told CNBC on Tuesday mornings that he has counted 62 “panic attacks” on the current bull market, including October sales-off
. “The question is this is a panic attack or something else,” he says. “I also think this will pass. This will only prove to be another [buying] opportunity. “
Another factor weight in the markets is Federal Reserve’s commitment to gradually raise interest rates, which has been criticized by President Trump. Presidents prefer historically low interest rates as they help to boost the economy and, in turn, help the one who is in Oval Office.
Interest rate hikes have increased the US 10-year government bond to about 3.2 percent, the highest figure this year. The 10-year-olds are closely followed because it is another indicator of the economy and stock market future. Higher interest rates of 10 year could control investors who could sell shares as opposed to the less risky sovereign debt.
” Here’s what drives the markets over the last 10 days, “said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute. “Will the Fed make a mistake? Will global growth slow down? What will income be 2019? We do not believe global growth will slow down. We do not believe the Fed will make a mistake. And we do not think that It will be a serious trade war. “
US The markets were shouted early in the morning hours from the steep decline across Asia, reversing a small Monday rally abroad. The Japanese Nikkei 225, China’s weaving Shanghai Composite and Hong Kong’s Hang Seng all fell more than 2 percent.
Europe was also down with London FTSE 100 down almost 1 percent, German DAX down 1.8 percent and Freh CAC 40 fall slightly over 1 percent.
The markets are affected by many concerns: fear of the Chinese economy slowing uncertainty over a forthcoming US election; rising US interest rates; and worries that the long American bull market is on its last leg.
Strong tensions between the United States and Saudi Arabia, one of the world’s largest oil suppliers, have also put the markets on the verge of the death of a Washington Post columnist Jamal Khashoggi. Saudi Arabia’s ability to temper oil prices makes it a major player in the global economy.
Oil prices dropped Tuesday after Saudi Arabia said it would increase production, which would keep the world’s supply and demand for oil in balance. Oil prices are based on careful choreography between producers and consumers, with policies, economic growth, weather, accidents, terrorism and a million other factors affecting oil prices.
Almost the result of Brent crude decreased almost 3 percent to less than $ 80 a barrel, a key limit that signals an ample asset, at least in the short term. West Texas Intermediate futures also traded lower to around $ 68 a barrel.
A Saudi surplus would compensate for any Iranian shortage that follows the economic sanctions that will come into force next month against the country. President Trump retired from the nuclear agreement with Iran earlier this year and removed Iran’s supply from most oil markets.
“You look at everything that happens – Saudi Arabia, the oil market, Brexit, Italy, US elections, Fed-rise rates – I could go on and continue,” said Brad McMillan, chief investment officer of the Commonwealth Financial Network. “The question is not why the market reacts. The question is why it is not worse. “
McMillan said that he sees that the market is falling even more as part of a realm of the economy and global tensions. The revenue season so far has been healthy, although some companies have reported a slowdown in sales growth.
But the markets have seen several rebounds, including a decrease of 11 percent by the end of 2015 and the beginning of 2016. Then the market declined almost 10 percent earlier this year.
“This is normal volatility. I would not be surprised if there is more of a pullback, says McMillan. “But as long as the economic foundation remains solid, the market usually returns.”