Stock Market Correction?
The Dow Jones Industrial Average dropped 831.83 points Wednesday, a decline of 3.15 percent. That’s the third worst point decline ever. The NASDAQ market tumbled even further, by 4 percent.
Now, analysts are scrambling to determine if this will be a quick shortfall or the beginning of a much steeper market correction. Also, analysts disagreed about the nature of the decline. Some say it’s caused by the still-simmering trade dispute between the United States and Communist China. But others point to the upcoming election and complain market makers are trying to embarrass President Trump or hurt the Republicans.
U.S. financial commentator Peter Schiff, who has been issuing market warnings for some time, says the signs are bad. “U.S. stocks, bonds and the dollar all falling together is a warning sign that the party is coming to an end. Once gold breaks out, it will officially be over. Then look out below. How long before the Fed capitulates, and will a policy reversal stop the decline or accelerate it?” Schiff adds, “Interest rates are rising, stocks are falling, budget and trade deficits are exploding, as autos, homebuilders, and financials are all flashing recession. If you think you’ve seen this movie before, you’re half right. It’s a sequel to 2008, but the ending will be much worse!”
But others are signaling it’s just a necessary correction after a market that has climbed higher and faster than others around the world. Time will tell.
