Richard's Thoughts On Bull Markets and Corrections
It turns out that the volatile weakness in US stocks this week was kind of like the temblors that precede volcanic eruptions. Stocks opened sharply lower today, ostensibly on concerns that economic strength will push interest rates up higher than previously believed. In truth, we know that stocks have been very overvalued, and very, very, overdue for a correction for a long time – so today's action was inevitable and cannot be explained merely by higher rates. The trigger was the 10-year Treasury hitting 2.8%, with higher rates tending to draw money out of stocks and into bonds. Then a strong jobs report exacerbated that trend, and everything just went nuts.
Asian and European markets continued the weakness that had hit US share prices all week long. The Asia Dow finished down a moderate 0.60%, and then the STOXX 600 recorded a 1.38% loss for the day. Our western hemisphere ... Log in or subscribe to continue reading.
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