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Why the stock market is freaking out again
We’re only six days into the month, but investors are probably already sick of August after another brutal trading day. Confused by what’s going on? Let’s break it down.
market meltdown
For the third day in a row, US stocks got hammered. The market volatility is due to a mix of factors including poor earnings results from several tech giants and a weak July payroll report.
the global market
Japan is battling deflation, making it a prime target for a type of arbitrage trade where firms borrow money in yen and then invest in currencies yielding higher interest rates. But last week, Japan’s central bank raised rates which sent its currency higher and tanked its largely export-facing stock market in the process.
WHO’S TO BLAME?
The market has felt overvalued for a while, so it’s natural investors might look to take some money off the table. But if you’re desperate to place the blame somewhere, you might start with the Fed.
winners and losers
Plenty of investors are repositioning their portfolios for a recession and hedge funds are a mixed bag. As bad as things have been, the US isn’t in a recession. Former Fed official Claudia Sahm, who created a widely followed recession indicator, is optimistic about the economy’s future.
