{"id":61788,"date":"2014-10-13T02:57:44","date_gmt":"2014-10-13T06:57:44","guid":{"rendered":"http:\/\/countingpips.com\/?p=61788"},"modified":"2014-10-13T07:18:50","modified_gmt":"2014-10-13T11:18:50","slug":"global-stocks-plunge","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/10\/global-stocks-plunge\/","title":{"rendered":"Global Stocks Plunge"},"content":{"rendered":"
October 13, 2014<\/div>
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By HY Markets Forex Blog<\/a><\/u><\/strong> <\/p>\n

Global stocks fell sharply on Tuesday, Oct. 7, as market participants responded to concerns about the future of global growth.<\/span><\/p>\n

US Stocks drop<\/span><\/span><\/h2>\n

The S&P 500 dropped 1.5 percent to 1,935.01<\/a> at 4 p.m. in New York, according to Bloomberg. This value was the lowest the benchmark group of stocks has reached since Aug. 12. Smaller companies also saw their shares move lower, as the Russell 2000 Index plummeted 1.7 percent.\u00a0<\/span><\/span><\/p>\n

The Dow Jones Industrial Average, a index containing the securities of major U.S. companies, suffered a similar decline, moving 1.6 percent lower to 16,717.27, the media outlet reported.<\/span><\/p>\n

Foreign Equities move lower<\/span><\/span><\/h2>\n

Several indices representing equities of companies in nations also fell<\/a>, as the Nikkei 225 index depreciated 0.8 percent. In Europe, the DAX index and CAC 40 declined 1.3 and 1.8 percent, respectively, USA Today reported.<\/span><\/p>\n

One development that coincided with the decline in global stocks was news that German industrial production dropped 4 percent in August from the prior month, far more than the 1.5 percent predicted by analysts, according to the news source. In addition, figures released on Monday, Oct. 6, indicated factory orders in Europe’s largest economy were weak in August.<\/span><\/p>

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Amid these pressures, market participants are becoming increasingly worried that European Central Bank policy will fail to jumpstart economic activity and ensure strong enough inflation, Bloomberg reported.<\/span><\/p>\n

IMF Outlook<\/span><\/span><\/h2>\n

Another major factor that could have impacted equity values<\/a> was news that the International Monetary Fund cut its outlook for how the global economy will fare in both 2014 and 2015. The organization lowered its growth prediction for this year to 3.3 percent, compared to its outlook of 3.7 percent in April 2014. The IMF lowered its forecast for next year to 3.8 percent.<\/span><\/p>\n

The organization cited several concerns in its report, emphasizing that the global expansion fell short of expectations during the first six months of this year, and downside risks have intensified. The IMF warned that robust use of central bank stimulus may have caused equities to reach inflated values.<\/span><\/p>\n

Market experts have spoken to this potential problem, noting that central banks the world over have been engaging in unprecedented stimulus that has increased the size of the money supply. The Federal Reserve alone has purchased more than $4 trillion worth of debt-based securities over the last several years, and this has certainly drawn attention.<\/span><\/p>\n

Amid this sustained stimulus, the Fed itself said earlier this year that certain biotechnology and small-cap stocks might be inflated, according to Bloomberg. The latest news about global growth – including the euro zone data and the IMF statements – certainly impacted investor sentiment, said Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC.<\/span><\/p>\n

“It’s definitely a risk-off day with ugly European data and growth concerns and I think we’re seeing some of that negative sentiment just getting ahead of itself here,” he told the media outlet.<\/span><\/p>\n

Andrea Kramer, analyst at Schaeffer’s Investment Research, gave her two cents, asserting that the IMF forecast and the German data served as a key impetus, according to USA Today.<\/span><\/p>\n

“The Dow took a nosedive out of the gate today, due to escalating concerns about the global economy,” she told the news source. “Lackluster industrial output data from Germany and a downwardly revised global growth forecast from the International Monetary Fund got the bearish ball rolling.”<\/span><\/p>\n

Amid the sharp decline that U.S. stocks suffered on Oct. 7, some market experts are optimistic about stocks<\/a> in the near-term, according to MarketWatch. Burt White and Jeffrey Buchbinder, who serve as chief investment officer and market strategist at LPL Financial, are in this particular camp. On Oct. 7, they wrote a note displaying their optimism, predicting “another good earnings season” that will probably push stocks higher in value.<\/span><\/p>\n

In backing up this claim, they noted the Institute for Supply Management manufacturing Index’s improvement over the last six months, and the recent acceleration in U.S. economic growth. The ISM index can predict future earnings on a fairly consistent basis.<\/span><\/p>\n

Investors who trade stocks online could benefit from being aware of the sharp drop that global equities suffered on Oct. 7. Knowing the explanations market experts gave for this decline might also help them make better-informed decisions.<\/span><\/p>\n

The post Global Stocks Plunge<\/a> appeared first on | HY Markets Official blog<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

By HY Markets Forex Blog Global stocks fell sharply on Tuesday, Oct. 7, as market participants responded to concerns about the future of global growth. US Stocks drop The S&P 500 dropped 1.5 percent to 1,935.01 at 4 p.m. in New York, according to Bloomberg. This value was the lowest the benchmark group of stocks […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-61788","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/61788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=61788"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/61788\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=61788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=61788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=61788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}