US Market - What now?

 October 9, 2014

US Market - What now?

     US market dropped 335 points, Dow Jones is now 16,659 points , is the first time since June 2013  

This is due to a five reasons;  

     1)  International Monetary Fund (IMF) lowered global Growth this year and Next year, citing Japan, Latin America and Europe's weak economic growth. IMF expects the global growth of only 3.3 percent this year, lower than the July forecast .

     2) Global Growth concerns. Wall Street worried about the global economic slowdown, espicially in the euro Zone will deteriorate further, dragging down demand for products and services around the world, and the damage to the American Company's profitability. 

Wall Street's major Indexes Critical Level, such as S&P 500 stocks index close down 40.68 points, or 2.1 percent, to 1928.21. 

   3) The power of the European Central Bank is questionable. Back in July 2012, European Central Bank President Mario Draghi spoken on the global market, he basically said the ECB 'will do whatever it takes" to keep the eurozone intact. But Drudge actually frightened today's market, he believes the euro zone economy is slowing and warned that policy makers must raise inflation from "low" level. The worry is that the ECB is behind the so-called curve. Wall Street hopes to launch a US-style sovereign bond-buying program to stimulate demand, and the euro-zone economy. However, Draghi has not made a positive move. 

   4) Commodity and energy stocks had been sold down alot lately, West Texas Intermediate crude oil per barrel has sunk below the level of $ 90, a level not seen in the last two years. Texas Intermediate crude oil per barrel fell nearly 2 percent, $ 85.87 a barrel today

5) The Market Selling is due to the market has peaked, tired and overbought and there is a need to reduce the excess foam. Standard & Poor's 500 index is celebrating its three years official correction, as from the recent highs of 10 percent. At the same time, three Fridays ago, e-Commerce ALIBABA ushered in an Initial public Offering. 


      Watch this month after the Company reporting Earnings. This will decide on the four Quarters Stock Market whether it is good or bad. Should also concerned about the very strong support of the Dow Jones which is at 16,600 points.