What is Going on With the Stock Market?

I'm sure I'm not the only one experiencing the recent dip in the Stock Market. After a week of ups and downs, it finally seems to be consistently falling.

So, what's going on? 

In President Trump's first year in office, the Stock Market saw record after record broken. Enthusiastic investors made us all excited for the future our President was promising.

In my estimates, however, those times are over. For now, at least. 

Although we have seen a surging Stock Market on many days of this year, aided by plenty of comments from the President, we actually saw an average Stock Market decline in the first quarter. In fact, this was the first quarterly decline since 2015. With Monday's decline, the Stock Market has seen a 4 percent decline already this year. This is according to a report from Reuters. 

This is the result of many factors that you probably wouldn't understand, but let me give you a high level description of the few that matter. 

First of all, many investors worried that the economy was growing too fast. If the economy started to grow too fast, central banks would be prompted to hike interest rates sooner than expected. Higher interest rates are bad because that eats into the potential profits of some companies.

This scared investors. How would companies react?

Then, there is the risk of a trade war that came out of Washington and President Trump. This came from imposed tariffs on different products. This caused backlash from other countries who were quick to put tariffs on their own products.

This caused some investors to worry that the US Economy, compared to the rest of the world, would falter. 

Lastly, and most recently, came the issues with some tech companies. This came after some mishandling of data. In an age of data data data, this is such a touchy subject for many. This worried investors because of how hard it is for companies to respond to demands like they are now facing.

More specifically, President Trump has also been attacking Amazon recently for many reasons including retailers closing and their relationship with the Post Office. He is worried that Amazon is causing the Post Office to lose money and therefore become weak. They disagree. 

In true Trump Fashion, he even tweeted what seemed to me like a threat against Amazon.

The uncertainty is real.

I worry what this means for the economy. I worry that Stock Market uncertainty will cause consumers to stop spending money and the economy will struggle.

Of course this is all speculation, the markets are so uncertain that no one can perfectly predict what will happen with them. They could bounce back later this week and see increases that balance out the struggles. Who Knows.

But, in my opinion, for that to happen, the Stock Market will need a little cheering on. 

Where is the biggest Stock Market Cheerleader when we need him?

Mar-a-Lago

-BT-

 

 

Blake TarmannComment