What is driving the stock market sell-off?

  • 📰 TheCitizen_News
  • ⏱ Reading Time:
  • 52 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 24%
  • Publisher: 75%

United States News News

United States United States Latest News,United States United States Headlines

Must investors be worried about the stock market sell-off that started with the Bank of Japan increasing interest rates?

Investors are wondering what is driving the stock market sell-off that has caused heightened stock market volatility in recent days with steep falls for major indices.The MSCI All-Country World Index was down -6.4% in three days and there have been signs of recovery since last Tuesday, with Japanese markets rebounding. But what was behind the sell-off and how worried should investors be?

raising fears of a recession in the US and an expectation of rapid rate cuts, combined with a surprise interest rate increase from the Bank of Japan and worries over corporate earnings. Brown says the worry for investors is whether the Fed has left it too late to cut interest rates and if its inaction risks causing a recession. “The problem is that in June the Fed signalled only one rate cut this year. That was too hawkish and left it unable to pivot swiftly in July. The Fed may cut by 50 basis points in September to make up for lost time but the market is now pricing in five cuts in 2024, which is an overreaction.

When combined with the weaker US data , this caused a sharp strengthening of the Japanese yen. In turn, this sparked further market volatility. Taku Arai says: “A reversal in yen weakness, coupled with wage growth, is expected to support consumption going forward. Based on these economic trends, we maintain a positive outlook on the earnings strength of Japanese companies as a whole.”

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 6. in US

United States United States Latest News, United States United States Headlines

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

‘SA's removal from greylist will avoid negative effects on economy’ - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.Reserve Bank Governor Lesetja Kganyago addresses the central bank's AGM in Pretoria.
Source: SABCNews - 🏆 37. / 51 Read more »