Bear Market
The stock market continues to fluctuate negatively as 2018 comes to an end. From rising interest rates, to the trade war between the United States and China, to the recent arrest of Chinese tech executive, investors look for hope.
Stocks have been on a bumpy ride lately. Market Watch reporter Sue Chang says, “Sandwiched between the harsh realities of a prolonged trade war with China and hopes that the Fed will back off from its tightening bias, the lack of certainty on trade and policy has made for a volatile market.” Investors are looking specifically at the Fed, that has raised the interest rates. What do rising interest rates mean for stocks? Higher rates make it more expensive to borrow money, and without money, there’s no investment. The better investment in this case are bonds. They tend to have a greater future value with higher interest rates. But what else is holding the stock market back? The trade war between the U.S. and China.
For some time, talks that the U.S. and China reached an accord with two countries agreeing on additional tariffs, in a bid to work out a trade deal were going around. President Donald Trump even tweeted, “China talks are going very well!” The agreement didn’t last long with the arrest of a high-profile Chinese tech executive grabbing stock headlines. Tech stocks rattled down as tensions between the U.S. and China sparked up. Carlos Montoya, an active investor said, “I’m going to wait to buy more stocks. Right now the stock market acts very unpredictable. I have seen many of my stocks lose value these past few months.” So when will the stock market stabilize itself again? We’ll have to wait and see.
