Dow futures fall 97 points as stocks look to pull back from record highs
After the record high of 23,000 where it closed at Wednesday, the Dow dropped significantly Thursday seemingly in response to the record high. The record high could have scared some people as they possibly anticipated a drop off from the record high. This thought process is shown that people decided to sell and get out while it is good.The attitude of buyers and sellers of stock affects the stock market. If people think the stock market is going crash it will not continue to grow, it will shrink. That is one of the characteristics of an open market economy, that confidence of the consumer directly affects the economy.
What else do you think caused the drop in the Dow?
https://www.cnbc.com/2017/10/19/us-stock-futures-earnings-catalonia-concerns-dow-on-the-agenda-for-wall-street.html
Some commentators think the stock market is bound to drop because share prices are so record high. But some believe the economy won't necessarily crash with it because economic fundamentals are solid. There is a belief that the stock market will drop due to "herd mentality"--when a large enough number of investors decide to exit stocks, this could cause others in large numbers to follow. The question is what could trigger this. It could beone of many factors: worsening of the conflict with North Korea, a scandal at one of the highly valued firms, or a downturn in some aspect of the economy.
ReplyDeletehttp://fortune.com/2017/08/10/stock-market-crash-today-down-bubble-2017/
With so many recent disasters a lot of the meat production plants are out of order and play a hand in why some food chains are out sourcing and looking for livestock elsewhere. Allowing a decrease in investment and curving the stock market downwards.
ReplyDeleteI read the same thing as Xavier. The "Herd Mentality" theory really has proven to be true with the record high closing on Wednesday. The market will continue to fluctuate but in my opinion I think we will see the Dow start rising back to its point on Wednesday once investors get over the initial scare.
ReplyDeleteNow that we are almost a week past the original peak at 23,000, it has continued to rise above 23,450 while continuing to hit record highs. Two large components of the DOW, CAT and MMM, both had record gains in a single trading day (4.59% and 7.43%, respectively) (marketwatch.com). I do believe these gains will not be sustainable, but I do not see the market plummeting due to the current market stability.
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