Fear And Loathing In The Stock Market
A recent bearish hike in interest rates spooked stock market investors from around the globe. While a major shakeup may not yet be in the cards just now, experts say it’s a sign of things to come as the world’s major banks move to end easy policy.
A stock market is the aggregation of buyers and sellers of stocks, which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment in the stock market is most often done via stockbrokerages and electronic trading platforms. Investment is usually made with an investment strategy in mind.
The European Central Bank (ECB) is expected to announce a 50 percent reduction in the €60 Billion of bonds it buys each month. The Bank of England and Federal Reserve also meet next week.
James Paulsen, Chief Investment Strategist at Leuthold Group said, “This is a good example of the future. If it goes on too long and too fast then it’s going to be too severe. If it’s pretty measured, I think we can handle rising rates for a while.”
The yield on the 10-year Treasury note jumped to 2.47 percent, after having breached the technically important 2.40 level just the day before.
By the afternoon, yields settled back and the 10-year was at 2.44 percent.
Stocks traded sharply, as yields touched their high point, with the downs averaging 190 points before erasing about half its losses.