Stocks Fall in Global Sell


Stocks in the United States appear to fall in the global markets today as more emerging currency markets make the sell, according to the Wall Street Journal and other sources. Bloomberg reported that the Dow had the worst week since summer 2012 and other exchanges echo the fallback. Major manufacturers slid in the Dow and Standard & Poor’s (S&P) 500 index was down 1.4 percent just before noon Friday.

Wall Street Journal’s Matt Jarzemsky reported that this was part of a huge two-day sell off in the global equities markets that began this week, which hurt US stocks. The NASDAQ also came down to just over a percent. He cited the economy in China as one source of fear. Another was the central bankers’ policies in economic stimulus. They fear the stimuli, which is considered by many to be more easy printed paper money, will not be available as policies scale back. Stocks fell as a result. WSJ also noted the volatile markets that traders cited as a reason for many investors to make the wrong plays in the market. US corporate earnings were also a factor in the stocks game.

The Fed (Federal Reserve Bank of the United States) is a source of major fear for many investors because its fiat money policies that were implemented to stimulate the economy create inflation on goods and services and puts a pinch on spending when wages can’t increase with the inflation. This position is a stark contrast to the gains made last year, reports indicate. The US stocks that fall in the global markets will be the anxiety of companies as investors sell off.

US Treasury bonds took a dip as investors dug into them after stocks. China’s factories are in a slowdown in terms of productivity and this is another reason for the sale of stocks and bonds in the market, according to some analysts.

Quantitative easing, a practice that has been criticized by many Austrian economists, fiscal conservatives and libertarians, is being scaled back by the Fed and this has many investors worried as easy money will not be available. It keeps interest rates low and led to a “bull market” last year that will not be seen this month as investors will not invest in the more risky stocks in the market.

Political and social issues have also affected the stock market, such as those that took place in countries like Turkey and Argentina. The Middle East and Ukraine are also having their own sets of problems in the social and economic domain.

This month, the Fed will continue to scale back its stimulus and quantitative easing programs and emerging markets are having a tough time dealing with this particular issue, which in turn has investors struggling to cope with circumstances. They fear that liquid assets will disappear and they are in a frantic buzz to sell stocks right now, analysts say. It isn’t quite clear yet if stocks that fall in this global sell off will bounce back soon.

By Rob Lawson


SF Gate

Wall Street Journal

LA Times

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