That uncertainty crept into the market, and says Rehman, the U.S.’s talk of raising interest rates to slow the American economy didn’t help.
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So instead they were basically forced to let the market crash, which is what caused the global ripple effect yesterday. China still claims a healthy 7 percent annual growth rate, but many economists wonder if it’s not much lower. That hurts the bottom line of companies such as Germany’s Siemens or the U.S. giant Caterpillar. The Shanghai Composite index rose 140 percent in 2015.
That being said, several market watchers said equity returns could be muted for the next several years, with one analyst suggesting investments may be “stuck in low gear” for the next five years.
Markets began falling last week after China announced a surprise devaluation of its currency, the yuan. On late Tuesday, a statement from the government said that the country’s parliament has been dissolved, a sign that an announcement on the date of the general election is imminent.
Despite the haphazard selling, some, including our wealth-management firm, elected to be buyers on the open. With a very overdone VIX, volume skyrocketing due to margin calls, and just two new highs versus more than 1,200 new lows, according to CNBC, the market appears ready to rally.
“It definitely makes you leery of what’s going on”. Otherwise, prices need to fall a lot more before wary investors get off the sidelines.
If you don’t work in finance, the best thing for you to do when the market crashes is move on with your day and look ahead to tomorrow.
“I hear the concern. It’s not a complete negative”, Collins said.
But in percentage terms, the 13.5-percent decline over that span is not out of the ordinary. But they are not the only reasons for what now has been more than a week of sudden global volatility. But stocks sagged as the closing was in sight, and the Dow ended off 3.6%.
Wal-Mart could benefit in that goods out of China will be cheaper, but the global retailer also has a retail presence in China and those operations will suffer if the Chinese economy falters further and consumer spending is reduced.
It wasn’t all doom and gloom for energy stocks, however. The S&P 500 fell 3.9%, and the Nasdaq was down 3.8%.
The cut means the ratio will be at 18%, down from 18.5%. Merck was the biggest loser, down 5.2 percent.
It had been nearly 1,000 days since the last time the broad market had a 10% correction.
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In Southeast Asia, Singapore’s Straits Times index erased a dismal to close 1.51 percent higher. Nowadays IBM is playing catch-up in the cloud, and its top- and bottom-line guidance have paid the price as its legacy business shrinks while its cloud-based operations grow.
