The stock
market goes up and down, so that day traders and investment companies can buy
low and sell high. They use every event they can think of to do this. This is
an auction. If you can get a 1000 point rise in the Dow and sell to harvest
cash, you can go right back in and buy low again.
This time
it was the Federal Reserve announcement anticipation and actual lowering of the
Fed Funds Discount Rate from 2.5% to 2.25%.
The upswing on 7/23/19 was due to anticipation of a 0.50% cut. The
downturn on 8/2/19 was due to disappointment that it was a 0.25% cut, not a
0.50% cut.
The
“uncertainty” over getting a trade deal with China is another non-crisis that
can trigger ups and downs. The companies who sent their manufacturing to China
are not happy, but our quickest road to restoring manufacturing jobs is to
tariff everything from China and not make a deal. The News Media triggers these
events by overblowing each event with what could go wrong. This is how you get
the memo.
The
latest stock market dip
Date Dow
Average Closing
7/1/19 26,717.43
7/23/19 27,349.19 (631.76 gain)
8/2/19 26.485.01 (864.18 loss)
8/6/19 26,029.52 (455.49 loss)
8/8/19 26,378.53 (263.52 gain)
This was
a correction back from the 27,000 level to the 26,000s.
Dow
Average Closing by Year
2019
25,857
2018
25,047
2017
21,750
2016
17,927
2015
17,587
2014
16778
2013
15,010
2012
12,996
2011
11,958
2010
10,669
2009 8,886
This sets
up more expectation for the Dow to go back up the over 27,000. I believe the
Dow and the S&P 500 Index will continue to be a mixed bag, with companies
screwing up, getting lucky, hyping their bandwagons and sacrificing growth to
get a high quarterly return. I am bearish long term on government, education,
healthcare, retail and financial “services”. I am bullish on manufacturing,
resource extraction and construction returning to the US.
Norb
Leahy, Dunwoody GA Tea Party Leader
No comments:
Post a Comment