The stock market is a vital part of the economy. Millions of people invest in the stock market each year to save for retirement. For most of the past decade, the market has increased drastically. After the recession in 2008, the stock market rebounded and helped investors recover financially.
When President Trump was elected, the stock market roared. He touted his economic accomplishments and took credit for the higher market. Over the past month, the stock market has suffered a massive correction. Some investors are worried that the economy is on the brink of another recession. Others are viewing the latest stock market plunge as a buying opportunity.
Interest rates are a critical aspect of the economy. Lower interest rates tend to stimulate economic growth. When the economy was in a recession, interest rated were lowered to stimulate demand. In recent months, rates have started going higher. Some economic analysts are worried that the economy is not strong enough to deal with higher rates.
Another major issue in the world is the current trade war between the United States and China. The world’s two largest economies recently enacted tariffs on most products sold between the two nations.
The fallout from the trade war is unknown. Some people believe that this political conflict will get resolved in the coming months. Others think that the latest tariffs are only the beginning.
Many international companies are losing profits due to the tariffs. Numerous business leaders have mentioned the tariffs on conference calls with investors. Some political leaders have started to ask President Trump to rescind the tariffs. A resolution to these trading issues could result in a massive boom for the stock market.
Multiple stock market analysts believe the latest dip is a massive buying opportunity. Various companies are down to multi-year lows. Anyone buying stocks needs to conduct solid research before making a purchasing decision. Few people think that the stock market drop is over.