NASDAQ and the Global Economy Slump

NASDAQ

The NASDAQ and global economy appear to be in a slump. Retail sales and producer prices were reported falling in the U.S. while global markets have also taken hits. Oil prices have fallen and China and Germany’s economy are reportedly struggling. Many Americans appear to be saving money and avoiding debt as a potential health hazard also breaks out worldwide.

According to Bloomberg, concerns regarding an Ebola outbreak have affected the stock of U.S. airlines. Joseph Ciolli stated stocks have declined as much as 22 percent over fears of a decrease in airline travel. Not only that, Ciolli reported that Andrew Wilkinson of Interactive Brokers had stated markets could be in “bad moods” which have affected various stocks.

Reuters reported retail sales were down by as much as 0.3 percent for September, but the surprising part was after factoring out gas, autos, building supplies, and food service, sales were still down by as much as 0.2 percent. A decline in clothing retail was reported around 1.2 percent, which may be a significant factor, but Reuters also stated retail sales may have seen a greater decline if it was not for the launch of the iPhone six.

Seattle Post-Intelligencer stated Europe’s biggest economic contributor, Germany, was showing signs of struggle. Greece was another country showing signs of trouble as the nation was bailed out not long ago, and may continue to be in trouble. Seattle P.I. mentioned a number of global traders took money out of risky investments and placed it into U.S. government bonds of cash and gold.

Citigroup was reported to be pulling out of 11 consumer markets to focus on “countries where our scale and network provide a competitive advantage,” Michael Corbat, CEO of Citigroup had stated. The news comes after Citigroup is reportedly facing trouble with units in Mexico as well. Affected countries include Spain, Greece, Japan, Costa Rica, and Egypt to name a few. The decision also comes two years after Corbat replaced Vikram Pandit, former CEO of Citigroup.

While the NASDAQ and global economy appear to be in a slump in most recent times, key factors may be attributed to declining sales and consumer behavior. Reuters reported while there were 7 new highs, there was also about 225 new lows on the NASDAQ composite.

International Business Times (IBT) reported about two-thirds of American consumers are deciding not to spend money, according to a Bankrate survey. Reasons listed were due to stagnant income, saving money, and worries over the economy. Household income appeared to be the biggest factor as the Consumer Confidence Index reported surveyors had stated concerns over strong job growth. Half of those aged 18-29, also referred to as “millennials,” stated concerns over saving money and about 12 percent of seniors, or those over 65 also reported a desire to save money.

IBT also reported that half of seniors surveyed were worried about spending money because their income does not change, while around 30 percent of those surveyed who are middle-aged were concerned about income growth. IBT stated that overall, it appears Americans are not concerned with economic stamina as much as the need to save money.

Though the NASDAQ and global economy appear to be in a slump over consumer behavior and economic activity, CNBC News stated American millennials and seniors appear to be the most Americans in debt. Student loans, mortgage options, and auto loans appear to be contributing to such heavy loads. According to CNBC, seniors are likely to co-sign on a mortgage for millenials due to increasing amounts of student debt. In fact, CNBC stated ten years ago, student debt accounted for around 13 percent of debt, whereas now, it is reportedly around 37 percent.

Though the fiscal year just ended for finances and the Federal Reserve System appears to be holding off on rate increases, it is clear the NASDAQ and global economy are in a slump. Perhaps the slump is due to consumer behavior or forecasts which overestimated the value of emerging markets, or business relationships. Perhaps stagnant income in the U.S. and the need to save money are reasons why numbers fell drastically along the NASDAQ composite over the past week. It could somewhat be due to the scare of an Ebola outbreak. Either way, real measures will happen after the coming holiday season when markets rely on total consumer spending.

Opinion By Liz Pimentel

See also Guardian Liberty Voice

Sources:
Bloomberg (Ebola)
Reuters (Retail Sales)
Reuters (NASDAQ)
Seattle PI
Bloomberg (Citigroup)
IBT
CNBC

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