General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy is the stock market tanking today?
Could this be due to the memo? Today is just another dysfunctional day in America.
spanone
(135,843 posts)unblock
(52,243 posts)the labor market is pretty much at "full employment", meaning additional demand for labor might actually lead to wage growth, which means corporates can't keep all the gains for shareholders.
spanone
(135,843 posts)unblock
(52,243 posts)spanone
(135,843 posts)RKP5637
(67,109 posts)Yo_Mama_Been_Loggin
(108,010 posts)RKP5637
(67,109 posts)Flaleftist
(3,473 posts)Its bound to happen sooner or later. Quick gains are only sustainable for so long. The question is how will the right blame Democrats for it?
leftynyc
(26,060 posts)which mean interest rates will be rising. That always send stocks down.
As unemployment drops, wages inevitably have to rise as companies are going to find it difficult to fill positions and thus, have to raise wages. That's going to lead to higher than expected inflation which means that the Feds have to raise rates which will lead to higher borrowing costs.
So, that Trump tax cut will be spent on higher interest payments on credit cards, student loans, and mortgages.
leftynyc
(26,060 posts)"middle class" tax cut was nothing but an illusion.
RKP5637
(67,109 posts)DemocratSinceBirth
(99,710 posts)Yavin4
(35,441 posts)As will all companies.
lagomorph777
(30,613 posts)Can't have the little people (401k chumps like us) knowing the truth.
Algernon Moncrieff
(5,790 posts)High levels of investor enthusiasm can be a bad thing when it comes to financial markets, as too much money can push valuations out of whack. BofAML's historically reliable indicator is pointing to just such a period.
The firm's strategists say overheated bullishness tripped its "sell" indicator Tuesday, in the early stages of what has been a rough week. When all is said and done, technical indicators point to a level of 2,686 on the S&P 500, which would represent a nearly 5 percent drop from Thursday's closing level, BofAML said in a note to clients.
This is the 12th time that the "Bull & Bear" indicator has indicated a "sell" position dating to 2002, and each time has been accurate, the firm said in a note last week. The average peak-to-trough return is a drop of 12 percent.
To be clear, a 12% selloff over the course of several weeks would be normal, and the article goes on to say that it's not all bad news.
titaniumsalute
(4,742 posts)The combination of a "too hot of a market" coupled with potential inflation concerns.
Bragi2
(37 posts)That can't be good for stock prices.
NCTraveler
(30,481 posts)The one to watch int the coming year is home builders, lending companies, and loan holders. In most areas in the country there is going to be a adjustment in home prices. Not all areas, but most. This adjustment will look nothing like '08. It will still be dramatic.
Lots of major things going on and I'm not sure if anyone knows how it's all going to shuffle out. Seems inflation is the one thing everyone is currently agreeing on.
ffr
(22,670 posts)Govt is losing money due to GOP tax cuts.
The goodwill the red state voters felt from getting revenge in 2016 is wearing off, now that reality is setting it that their savior is the demon himself.
If it is 2007 revisited. Do the math and get into safe haven investments or at least plan that way.
flamingdem
(39,313 posts)so no real signs of that, just a slightly overheated market and rising interest rates.
Overall the world is in good shape economically compared to other eras.
ffr
(22,670 posts)Employment numbers are already lagging behind, as indicated by Q4 2017's mediocrity.
flamingdem
(39,313 posts)The issue is too much employment and pressure for higher wages that leads to inflation/lower stock prices
ffr
(22,670 posts)$20.5T in public debt outstanding with a government that's pouring fuel on the printing presses.
I'm not going to discount your point, but my point is, the fundamentals of this economy are not sound.
flamingdem
(39,313 posts)That's going to hurt for sure.
cbdo2007
(9,213 posts)And the memo certainly creates that.
My read on this is that the financial markets think the memo pushes us significantly closer to impeachment, which will ultimately bring the major correction we have been expecting which I would guestimate at 15-20 percent.
lunasun
(21,646 posts)Hamlette
(15,412 posts)especially wage inflation as mentioned earlier. But inflation in general causes interest to go up so people leave the market to invest in bonds and savings. The market is cooking in part because interest is so low. If you can get say 10% interest in a federally insured bank account you'd leave the market so a more sure bet. Or at least I would. Interest is presently at a max of 2% (if that) and the market is up 30% in a year. Probably time to move.
Sophia4
(3,515 posts)That is my opinion.
Wellstone ruled
(34,661 posts)is not about to happen because of what happened this morning. Secondly we are now seeing the increase in the deficit blowing the Debt Ceiling out of the water. We are at some 1.8 Trillion and growing with a 1.5 Debt Ceiling previously agreed to..
We are headed to a Government Shut Down next Friday.
Yonnie3
(17,442 posts)Expectations of corporate earnings have lessened for several reasons that are given in posts above.
I would not characterize a 1~2% market pullback as tanking.
customerserviceguy
(25,183 posts)that rising wages will cause the Fed to jack up interest rates, and that will be bad for the stock market.
redstatebluegirl
(12,265 posts)go through the roof, will they blame the democrats and Obama for that too?
redstatebluegirl
(12,265 posts)We made some adjustments a few weeks ago because we were afraid something like this was coming down the pike.
TNLib
(1,819 posts)For some reason the stock market doesn't like wage increases and low unemployment it cuts into corporate profits and flames concerns about inflation. There is also a stock bubble and a bond bubble so a correction is needed.
Basically too much exuberance in the markets for the past year.
Initech
(100,079 posts)This is what happens when you let a hostile foreign intelligence entity calling itself a "news network" dictate policy for 20+ years.