Not sure the Republicans can run on the economy

[FreeinChrist]

Dow falls 600 points and wipes out 2018 gains; Nasdaq enters correction territory

October is shaping up to be a brutal month for equities, as expected, with the S&P falling 8.9% month-to-date, the Dow down 7.1%, and the Nasdaq falling 11.7% since the start of the month.

Wednesday’s session also sent the Dow into losing territory for the year, with the index down 0.6% in 2018. The blue-chip index is also down for five straight weeks, it’s longest string of weekly losses since July, 11 2008, when the market fell for six straight weeks.

The S&P 500 also ended the trading day in the red, down 0.7% year-to-date.

​

Stocks Take Yet Another Plunge in Dismal Month for the Market

Traders blamed worries over slowing growth in China and costs related to President Donald Trump’s trade policies.
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I am hoping for a year end rally.

​

 

[Aryeh Jay]

Well, for the last two years we have been hearing that it is still Obama’s economy so…

 

[FreeinChrist]

Obama didn't have a trade war though...

 

[Aryeh Jay]

I thought the new term was “negotiating a better deal”.

while giving the farmers government kickbacks…

 

[mark kennedy]

Dow falls 600 points and wipes out 2018 gains; Nasdaq enters correction territory

October is shaping up to be a brutal month for equities, as expected, with the S&P falling 8.9% month-to-date, the Dow down 7.1%, and the Nasdaq falling 11.7% since the start of the month.

Wednesday’s session also sent the Dow into losing territory for the year, with the index down 0.6% in 2018. The blue-chip index is also down for five straight weeks, it’s longest string of weekly losses since July, 11 2008, when the market fell for six straight weeks.

The S&P 500 also ended the trading day in the red, down 0.7% year-to-date.

​

Stocks Take Yet Another Plunge in Dismal Month for the Market

Traders blamed worries over slowing growth in China and costs related to President Donald Trump’s trade policies.
​

I am hoping for a year end rally.

​

I'm hoping he comes to his sensrs before he drives our economy off a clift.

 

[LostMarbels]

How Do Interest Rates Affect the Stock Market?
By Mary Hall | Updated October 11, 2018 — 10:15 AM EDT

The investment community and the financial media tend to obsess over interest rates—the cost someone pays for the use of someone else's money— and with good reason. When the [URL='https://www.investopedia.com/terms/f/fomc.asp']Federal Open Market Committee (FOMC) sets the target for the federal funds rate at which banks borrow from and lend to each other, it has a ripple effect across the entire U.S. economy, not to mention the U.S. stock market. And, while it usually takes at least 12 months for any increase or decrease in interest rates to be felt in a widespread economic way, the market's response to a change (or news of a potential change) is often more immediate....

[/URL]
So now we see how those ripples can rock the stock market. If a company is seen as cutting back on its growth or is less profitable—either through higher debt expenses or less revenue—the estimated amount of future cash flows will drop. All else being equal, this will lower the price of the company's stock. (For related reading, see: Taking Stock of Discounted Cash Flow.)

If enough companies experience declines in their stock prices, the whole market, or the key indexes(e.g., Dow Jones Industrial Average, S&P 500) many people equate with the market, will go down. With a lowered expectation in the growth and future cash flows of the company, investors will not get as much growth from stock price appreciation, making stock ownership less desirable. Furthermore, investing in equities can be viewed as too risky compared to other investments.

 

[TuxAme]

The world isn't falling. Our policies have proven themselves to be effective for the past two years, and we don't forget about that because of outside factors causing sudden, temporary disappointment- particularly when the alternative the democrats have to offer is a return to economic stagnation.

 

[FreeinChrist]

referring to Not sure the Republicans can run on the economy

I think that is a real limited view of the stock market and why it dropped. Much of the federal funds rate is priced in stocks in advance.

This drop this month is correction, and a reaction to global drops and has a number of causes including Trump's trade war. The Italian budget didn't get approved by the EU which is a factor for today's drop.

 

[FreeinChrist]

This article is suppose to have a more rounded view of why it dropped today, according to my stock market expert:

Here's why the stock market is falling and now down for the year

 

[Fantine]

If you look back at the past fifty plus years, the economy always does much better during Democratic administrations than it does during Republican ones. It's because trickle down economics doesn't work--and neither does "nationalism" in a global economy.

Higher interest rates aren't the only thing driving inflation. Retalitatory tariffs are. So much of what we buy is made in China--and they will all be more expensive.

 

[dqhall]

If you look back at the past fifty plus years, the economy always does much better during Democratic administrations than it does during Republican ones. It's because trickle down economics doesn't work--and neither does "nationalism" in a global economy.

Higher interest rates aren't the only thing driving inflation. Retalitatory tariffs are. So much of what we buy is made in China--and they will all be more expensive.

The huge deficits that resulted from tax cuts coupled with Federal spending increases are driving inflation. Interest rate hikes are needed to compensate fixed income investors who risk inflation and currency devaluation to invest. There is a supply demand component of interest rates.

Venezuela tried printing money to float their economy. Their economy is sinking along with the value of the bolivar.

 

[2Timothy2:15]

Obama didn't have a trade war though...

No he did not. He was happy with China dragging us through the mud.

 

[dqhall]

No he did not. He was happy with China dragging us through the mud.

Not really.

 

[2Timothy2:15]

Not really.

Kind of, it got it's biggest GDP growth under Obama

Xi must also calculate that time is on China’s side. “China’s economic development and military modernisation programmes have witnessed dramatic progress since the early-1980s,” said Karl Eikenberry in the American Interest. “China’s aggregate GDP in 1980 was the seventh largest in the world… By 2014, China’s GDP had multiplied 30 times to more than $9tn and is now the second largest in the world… The PRC’s military spending, less than $10bn in 1990, grew to more than $129.4bn in 2014, second only to that of the US.” On current trends, China’s 2035 GDP could be a third larger than the US, Eikenberry said.

Obama’s failed ‘Asian pivot’ leaves China ascendant | Simon Tisdall

And what people don't really know is the huge steel tariffs actually were implemented by Obama..


Funny how the media says tariffs were "wise" when Obama increased them...but sing a different tune now.
U.S. wisely gets tough with 522 percent tariff on Chinese steel

 

[variant]

I thought the new term was “negotiating a better deal”.

while giving the farmers government kickbacks…

We'll have to see about that.

 

[variant]

The world isn't falling. Our policies have proven themselves to be effective for the past two years, and we don't forget about that because of outside factors causing sudden, temporary disappointment- particularly when the alternative the democrats have to offer is a return to economic stagnation.

There is a lag effect from policy to showing up in the economy.

The policies of the last two years or so are actually only now starting to come to fruition.

 

[dqhall]

Kind of, it got it's biggest GDP growth under Obama

Xi must also calculate that time is on China’s side. “China’s economic development and military modernisation programmes have witnessed dramatic progress since the early-1980s,” said Karl Eikenberry in the American Interest. “China’s aggregate GDP in 1980 was the seventh largest in the world… By

Tariffs may bring higher consumer prices. Already Trump has rolled out a directive for payments to farmers affected by counter tariffs. It is socialized farming, welfare for farm owners. It is not promoting free market capitalism.

The tax cuts without spending cuts makes deficits and increases debt. If you get a cut in pay and increase your borrowing, what will happen to your credit rating? During Trump’s rise to power he declared bankruptcy six times. People who invested in his ventures got stiffed.

 

[TLK Valentine]

while giving the farmers government kickbacks…

It's not a kickback, it's a bribe... Donald needs to pay his base to support him even as his policies hurt their livelihood.

Familiarize yourself with the vocabulary of corruption...

 

[Rion]

A) wall street isn't the same as the economy.
B) It's back up
Dow surges 400 points as tech jump leads recovery from Wednesday's sell-off

 

[Ringo84]

Republicans have a wholly undeserved reputation, both as good stewards of the economy and as fiscally "conservative". Burning through billions of dollars to throw away money on a tax cut/giveaway to your billionaire friends is not "fiscally responsible"; it just raises the debt and gives them an excuse to continue chipping away at the poor.
Ringo