A Sell-Off with a long-term impact?
A sell-off that began last week after data in the US showed stronger wage growth, which raised expectations that US interest rates might start to rise more quickly to tackle inflation culminated in a heavy round of selling on Monday in the US that left the Dow Jones Industrial Average Index down 1,175 or 4.6% at the end of Monday’s session. This was the largest decline in percentage terms since August 2011.
Similarly, Asian markets followed suit with Japan’s Nikkei 225 closing down 4.7%. The trend also affected European markets with London, Frankfurt and Paris all falling sharply at the open with losses up to 3% before making up some ground.
Yet business analysts have stated that there are no indications pointing towards a prolonged period of selling although the same analysts did predict a period of more volatile stock markets. Commenting on the BBC Jane Sydenham, Investment Director at the stockbrokers Rathbones stated that the recent moves were a correction and not a crash. Similarly, speaking also to the BBC, Erin Gibbs, Portfolio Manager for S&P Global Market Intelligence stated that, “This isn’t a collapse of the economy. This is concern that the economy is actually doing much better than expected and so we need to re-evaluate”.
This article should not be construed as being investment advice but is intended solely for information purposes.