The world indices are in a race of “WHO CAN FALL BETTER” and it seems like NASDAQ and S&P are giving tough competition to all others.
The American indices, especially the NASDAQ and S&P have been falling consistently from the past 20 days. The biggest fall was on the 23rd of Sep 2020 when they plunged somewhere in the range of 2.5-3%. It is in itself a rare sight to witness. The major reason for the fall on 23rd was Tech giants led by Amazon which fell around 1%. Although it is easy to point out what led the fall for a particular day but what is the possible reason for the consistent fall from last 20 days? There is a high level of confusion as there seems to be no major reason for the markets to fall so drastically.
Given below are some of the reasons which have been overlooked by majority of us while keeping an eye on the markets, specifically NASDAQ and S&P indices.
1. HSBC Scandal
When HSBC scandal came into the limelight, it became the reason for the markets to fall that day. Although the markets were falling way before when it came into the picture but the new complications it brings to the market with the names and organizations associated with the whole story, it becomes a serious reason for the markets to keep falling.
2. COVID Scare
Investors started to relax and went back being bullish considering the fact that businesses were back on track and COVID cases seem to be under control. It was all going well until British government decided to go for a second lockdown keeping in view their increasing COVID cases, warning the world of a potential second COVID wave.
3. Overstretched US Markets
The US markets seemed to have reached their all-time high levels. As of September 2020, the US markets were standing at levels higher than that in September 2019 which is Pre-COVID. This puts them into an overstretched position, inviting correction which is now being termed as a fall by all.
4. US Elections
The US is about to witness its elections for the year 2020. At this time, with worsening circumstances, investors have become confused. Clearly, they are confused as to who will lead the new government and how prudent will they be in making the things go back to normal. It seems the majority of the people still wishes Donald J Trump to be elected as their president yet again. If that happens, a bull run can be expected.
5. Business Activity Dips, Unemployment
US officials recently disclosed the figures for rising unemployment in US which is a worrisome factor for the GDP. On top of that, the companies seem to be still highly affected by the low demands and low sales, an outcome of the COVID spread and lockdowns. Until and unless the businesses once again start working at their highest efficiencies and good revenue is generated quarter on quarter, the market might keep moving at a lower pace.
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Disclaimer: Views expressed on MoneySymphony.com are just an expression of thoughts. To no extend we are or should be held liable for any losses or conflicts. MoneySymphony.com suggest users take advise from certified experts before taking any actions or investment decisions. User actions may carry risk. All decisions remain the sole responsibility of the individual only.
Interesting insights. Some great pointsđđ