AMERICA IS Under Siege

[CC Writer]

I have an idea about the Market drop.

Maybe it's not that complicated. Maybe the big boys listened to Paul Krugman's dire predictions on Trump being elected and missed the market run up. Now with their business media buddies are making an effort to move the market down so they can get in before the next few weeks earnings reports. It's fun to speculate, isn't it?

I have an idea about the Market drop.

And I have my own as well. It is a combination of :

1.) Interest rate hikes have provided a good return on bonds, which are safer and preferred by the more cautious/conservative investor. Therefore, an outflow of money from stocks to bonds.

2.) The trade war with China is having an impact on China's economy. Chinese businesses are heavily financed by loans. The trade war is not only limiting returns on those loans, but creating losses to investors in China, including many multi-national companies in America, thereby increasing the probability of lower earnings in the near future.

3.), The Italian economy is also on a bubble, causing some instability in the European Union. Again causing fear and a probable pitfall for American multi-national companies and their near term earnings.

4.) And finally, oil prices are on the rise. Always a detriment to any growing economy, as energy prices also cut into profits of all companies. With the possibility of increased oil prices, if the Iran embargo goes into effect, rising energy prices create fear in the markets, as significant as rising interest rates.

So, it is a bit more complicated than most realize. This combination of factors added to an anticipated market correction, to a market that has been red hot, over the last 2 years, has caused this drop.

Just my opinion.