What’s really behind this bout of market mayhem? The truth is no one really knows

On Oct. 19, 1987, Black Monday, stock prices plunged, with the Dow Jones industrial average falling 22.6% in a day. Many commentators rushed to explain what triggered the crash — a response to some political event, some piece of economic data or whatever.

I’m dating myself here, but I often think about Shiller’s work when markets go wild, as they have the past few days. Still, let’s ask the question: Did recession fears set off this market plunge? The more you look at the facts, in particular which prices plunged, the less sense this story makes. Back to U.S. stocks: The biggest loser among major players was Nvidia, which makes chips used in artificial intelligence . AI-related companies and their stocks have been on a huge run, but there’s a growing sense, at least as far as I can tell, that they have been overhyped. As one source put it, “Concerns about it being a bubble arise from the hype surrounding unproven AI applications and massive investments driving unrealistic expectations.

One is gold, often regarded as a safe place to park your wealth. That role is way overstated, but in this case, at least, the metal lived up to its reputation, not losing much value in the crash. But I include it mainly as a point of comparison for the other asset, bitcoin, whose price plunged more or less in line with tech stocks.

So what caused the stock sell-off? I don’t know. What I do know is that nobody else knows, either. And it probably doesn’t matter much, unless this sell-off has major effects on the real economy.U.S. economic growth in the near future probably won’t be as robust as it was after Black Monday, since there’s a lot of evidence that the economy is slowing down for reasons unrelated to the stock market. But the crazy market action of the past few days was probably sound and fury, signifying not much.

Canada Canada Latest News, Canada Canada Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Market outlook, Despicable Me 4: Market Domination OvertimeUS stocks (^DJI, ^IXIC, ^GSPC) close out Monday mixed, but it's not all bad as the S&P 500 and Nasdaq Composite post new record highs and the Dow Jones...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Stocks rebound, housing market tips: Market Domination OvertimeIn today's episode of Market Domination Overtime, hosts Josh Lipton and Julie Hyman dive into the most prominent dynamics leading stocks and the US housing...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Market rotation, interest rates, copper crash: Market TrendsMarkets (^DJI,^GSPC, ^IXIC) pulled back in Friday trading, burdened by declines in chip stocks and investor rotations out of Big Tech into small-cap stocks, ...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Visa earnings, job market, stock market trends: Asking for a TrendToday's episode of Asking for a Trend, hosted by Josh Lipton, delves into earnings reports, market movements, and wage growth trends. The spotlight is on...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Saslove's Meat Market closing after 70 years in Ottawa’s ByWard MarketSaslove's Meat Market, one of the ByWard Market's oldest businesses, has announced it will be shutting its doors.
Source: ctvottawa - 🏆 29. / 67 Read more »

Saslove's Meat Market latest departure from a changing ByWard MarketJohn Diener is planning to close down Saslove's Meat Market at the end of September, ending the butcher shop's 70-year run in the ByWard Market.
Source: CBCOttawa - 🏆 68. / 51 Read more »