Adam Shell USA TODAY Published 5:32 PM EDT Oct 23, 2018 October is living up to its reputation on Wall Street as a month known for wild swings. The broad U.S. stock market dropped for the 12th time in the past 14 days Tuesday, putting it on track for its worst October since the 2008 financial crisis. The market, as measured by the Standard & Poor’s 500 stock index, has turned volatile since hitting a record high Sept. 20, taking a defensive turn. Investor psychology has become more cautious amid a growing list of risks that are putting a strain on the 9-year-old bull market. Those risks now include worries about corporate earnings after two industrial giants, Caterpillar and 3M, issued outlooks that worried investors, sending shares tumbling early Tuesday. That news added to existing investor anxieties caused by China’s slowing economy, global trade disputes and rising interest rates in the U.S., which makes borrowing more … [Read more...] about Stock market drops after Caterpillar, 3M issue disappointing outlooks
What caused the stock market crash of 1929
Adam Shell USA TODAY Published 8:19 p.m. UTC Aug 23, 2018 President Donald Trump, who has taken a lot of credit for the stock market boom since he took office, says a "crash" would happen if he were impeached. But Wall Street begs to differ, arguing that the forces driving the nearly $30 trillion U.S. stock market are far bigger and stronger than the influence of one person, even one as powerful as the nation's commander in chief. "One man does not move the market over the long term," says Thorne Perkin, president of Papamarkou Wellner Asset Management in New York. Trump, who raised the specter of his removal from office Thursday in an interview with "Fox & Friends," went as far as saying a bust would occur if he were to be forced out. "I'll tell you what, if I ever got impeached, I think the market would crash," he said, adding that without his kind of "thinking," economic results would get worse. "You would see numbers that you wouldn't believe, in … [Read more...] about Would Trump impeachment “crash” stocks, as president says?
Steve Keen is an Australian economist and author. He’s professor and Head of the School of Economics, History and Politics at Kingston University in London. You can support his attempts to build a new economics https://www.patreon.com/ProfSteveKeen. For years, Australia has been seen as the goose which laid the golden egg for workers, migrants and investors. Ironically, as America’s casino closes, it will eventually end up as a speculator’s paradise. The performance of the Australian stock market relative to its American equivalent since the Global Financial Crisis (GFC) shows the difference between a country where Quantitative Easing (QE) – the buying of bonds by the central bank to drive bond prices up and interest rates down, and thus encourage firms to invest and financial institutions to buy shares – was practiced and one where it was not. It’s both a warning about what could happen when the Fed starts to unwind QE, and a perverse … [Read more...] about Speculators will make hay from great Australian economic crash while workers pay the price
Could the bull market be over, and a stock market crash be imminent? In late April the Dow Jones Industrial Average sank more than 420 points, just under two percent, which leads some experts to claim that stocks have peaked. In addition, as US bond yields reached 3%, funds will slowly crawl into safe investments, leaving the stock markets with a shortage. Similarities between now and the pre-2008 financial crash were drawn but others have pointed to the near-record nine-year bull run the stock market has just experienced. What Causes Crashes? All of the famous US stock market crashes that occurred in 1929, 1987 and most recently in 2008 followed a similar formula. A new financial instrument or contraption creates a false sense of security, overinvestment causes a bubble, something happens where investors realize they made a mistake, sell quickly and the market crashes. However, if it was this simple then surely, we’d be able to predict when the next crash might happen? Yet … [Read more...] about How Close are We to a Stock Market Crash?
There is much more to the first-quarter drop in the S&P 500 Index than its modest 1.22 percent decline suggests. Everything from changing narratives in technology stocks to higher asset price correlations reveals a watershed moment for a bull market that has been underway since 2009. That was on display Monday, with the benchmark posting its worst April start since 1929. Below is a list of what the first quarter taught us about current market dynamics, and how they may inform investor psychology going forward.1. Too many investors are still overweight technology shares. Large-capitalization U.S. tech stocks were largely a one-way trade from 2010 through 2017, consistently outperforming with low overall market volatility. As a result, a lot of “lazy long” money flowed into the sector. The price action in large-cap tech shares the last few weeks underscores how many weak hands still over-own the sector. Tech insiders have been warning about data privacy and insular … [Read more...] about Bull Market in Stocks Has Reached an Inflection Point