Sharp sell-off in US stocks is the start of a 'very major correction'

Discussion in 'Latest US & World News' started by HumbledPi, Oct 10, 2018.

  1. HumbledPi

    HumbledPi Well-Known Member

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    https://www.cnbc.com/2018/06/19/jim...f-in-us-stocks-start-of-major-correction.html

    Today, the stock market had one of it's biggest selloffs since last February. The Dow Jones finished at -817.22 or 3.09% and the NASDAQ -315.97 or 4.08% of total market value.

    The selloff came on fears of rising interest rates. In the past year with a robust economy and a stock market rising to record levels, Trump took the credit for it - saying that it's a function of his policies. Will he take the blame for the severe losses on Wall Street today? I don't think so.

    Everyone knew that a huge bubble in the economy was forming and it would burst sooner or later.

    "The trade war worries are "certainly having an effect on the market, but the market is reacting because it's already far too expensive," Mellon said. "The U.S. is selling at 32 times cyclically adjusted price-to-earnings (PE) ratio, which is an all-time high. Surely it's time for a major correction anyway."

    Mellon is not alone in suggesting that today's stock market is the most overvalued on record — more so than in 1929, 2000 and 2007.
     
  2. fullmetaljack

    fullmetaljack Well-Known Member

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    The Republicans and Dirty Donald will try to blame the Democrats for this and the Democrats will use this at mid-terms, in a month, to show what an ignorant amateur Dirty Donald is when it comes to economics.
     
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  3. Kathie Harine

    Kathie Harine Active Member

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    The entire bull market starting in 2009 has been a Wall Street crack party fed by interest rates near zero. Corporations and financial institutions have done nothing but borrow billions to bet on the markets and buy back their own stock. Very few jobs were created that had any substance. Only low-wage, no-benefit jobs were created. Obama should have demanded a large infrastructure program from Congress before bailing out Wall Street. Trump has done nothing but follow Obama's lead. He also promised infrastructure programs but like Obama failed to deliver. The chickens are now coming home to roost.
     
  4. Dutch

    Dutch Well-Known Member Past Donor

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    Why blame? A good opportunity to buy... is what I’m gonna do. Stop looking for negatives and enjoy life... will yea? :hug:
     
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  5. 61falcon

    61falcon Well-Known Member

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    Depends on the whether,whether it is or whether it isn't.
     
  6. ronv

    ronv Well-Known Member

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    Pretty old news.
     
  7. Giftedone

    Giftedone Well-Known Member Past Donor

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    Holy Carp - I did not realize we were at 32 times PE. That's really high - historical average is 12-14.
     
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  8. Giftedone

    Giftedone Well-Known Member Past Donor

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    Not if the 32 x PE comment by another poster is correct. That's way too high. 12-14 is historical average.
     
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  9. ronv

    ronv Well-Known Member

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  10. Giftedone

    Giftedone Well-Known Member Past Donor

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  11. Nonnie

    Nonnie Well-Known Member Past Donor

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    Trump lowered taxes but expects the increase in the economy will cover the reduction. It's then obvious that at some point, inflation will happen. When this happens, Trump will blame the Federal Bank.

    Economies are like a sine wave, maybe America hasn't too long to go before it's at the top and begins the slide down.
     
  12. Carl Von Clausewitz

    Carl Von Clausewitz Well-Known Member

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  13. The Don

    The Don Well-Known Member

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    It could be the start of a major correction, then again it could be a one day blip in the longest bull market in history.

    IMO we'll only know in a few weeks or months.

    The one thing I am confident of is that if there is a major correction, the Democratic Party will blame President Trump and his policies and the GOP will blame the Fed, Obama and Hillary.
     
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  14. Mandelus

    Mandelus Well-Known Member

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    Correct ... right this will happen or alternatively it will be explained with BS chattering or they will blame the bad guys of Wall Street again to be guilty for it.
     
  15. Carl Von Clausewitz

    Carl Von Clausewitz Well-Known Member

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    Poor partisan fools can't see that both political parties collude together with Wallstreet.

    There is no independent grassroots political party or organization in the United States, they own it all. You all think you're getting freedom, democracy, independence, and better livelihoods where you can't even see the noose tighten around your own necks with every pressing year.

    You all think there are huge differences between both parties.:lol:

    ....Suckers....
     
    Last edited: Oct 11, 2018
  16. alexa

    alexa Well-Known Member Past Donor

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    Footsie continues to fall which they are now calling a 'correction'

    European shares at 20 month low

    China goes even further into the red

    “It is fair to observe and all people are observing that the US equity market and stock markets in general have been extremely high”.
    https://www.theguardian.com/busines...b07b0b8d7a343a#block-5bbf0161e4b07b0b8d7a343a

    Is this the next 2008 people have been talking about?
     
    Last edited: Oct 11, 2018
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  17. The Don

    The Don Well-Known Member

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    Who knows ? Pundits have predicted thirty seven of the last three recessions.

    One day, one week or even one month is too short a time-frame to know whether it's a recession, a short wobble in confidence or just a bit of profit-taking. At any time there are so many different leading and lagging indicators that it's likely pundits can find a few that support their chosen narrative.

    If the Dow is down 20% or more in two or three months time then perhaps it is right to talk about a correction. Until then IMO it's just speculation.
     
  18. Josephwalker

    Josephwalker Banned

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    Sears filed bankruptcy yesterday and that was a big part in the fear based sell off. Add to that the feds raising interest rates and recent bond performance and investors got panicked. We are due for a correction though and when you add all this stuff up yesterday was the perfect storm
     
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  19. CourtJester

    CourtJester Well-Known Member

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    Hopefully you didn't buy since futures are significantly down for a second day. Market is close to fully valued so to buy or not to buy is a bit of a crap shoot. My guess is buy with caution although there is a significant risk if the Democrats take the House and / or Senate.
     
    Last edited: Oct 11, 2018
  20. squidward

    squidward Well-Known Member

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    The Fed missed them all
     
  21. Dutch

    Dutch Well-Known Member Past Donor

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    Thank you for the advice, CourtJester. Like in everything else, I'm extremely conservative in my investments :)
     
  22. CourtJester

    CourtJester Well-Known Member

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    I am at the age where I am suppose to be conservative. But that isn't much fun.
     
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  23. JakeStarkey

    JakeStarkey Well-Known Member

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    The GOP have been in charge of Congress since 2009.

    Put the blame where it belongs.
     
  24. Mandelus

    Mandelus Well-Known Member

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    Ok .... :crazy:

    upload_2018-10-11_15-17-32.png
     
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  25. alexa

    alexa Well-Known Member Past Donor

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    In 2007 or 8 I seemed to notice it happening in a very short time - maybe one to two weeks.
     

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