Stock market tumbles by over 600 points
LEXINGTON, Ky. (WKYT) - The stock market saw the biggest sell-off in over a month on Monday. The Dow Jones Industrial Average dropped over 600 points after being down nearly 1,000 points in intra-day trading. Fiduciary financial advisor Josh Smith of Strategic Wealth Designers joined the newscast to talk about what happened. He says the concern is a multi-faceted problem that may not clear up in the near term.
“Right now you have cases of the coronavirus surging. The stock market doesn’t like any kind of information that could send re-opening backward or even head toward a shutdown again,” Smith says. “You also have this stimulus deal that keeps being floated by the White House and the House speaker but nothing is actually getting done. I believe the stock market has been pricing in the stimulus coming through but it continues to not happen at this point.”
With the election right around the corner, the White House has been eager to get a stimulus package passed. The Senate has been reluctant to commit to passing any type of additional spending package, especially something potentially going north of $2 trillion dollars. Smith believes the stock market’s direction hinges on what comes of this potential package.
“People are definitely worried right now. Some have fallen on hard times waiting for the economy to reopen their positions in areas like tourism and events,” Smith says. “Others do not like the uncertainty surrounding the presidential election that is coming up. The economy opening up is a much more significant cause for concern than who wins the presidential election from what we are seeing. A new president may bring change and potentially even higher taxes but it won’t derail the stock markets growth like another economic shutdown would.”
The big news came Monday night; Supreme Court Justice Amy Coney Barrett was confirmed by the US Senate, ensuring her as the next Supreme Court justice. While big news in political circles, Smith says it shouldn’t have much impact on the market for investors.
“Depending on what side you are on it has been an absolutely wonderful confirmation or a mind-boggling one,” Smith says. “Investors are not going to see any large swings in their portfolio from this news. This is more of a politically driven debate, not one surround investing. It’s also very important for everyone to remember that if you built your retirement nest egg with safety nets in place, no matter what news comes out your investments will be positioned in a manner to enjoy some of the gains in the good times but mitigate losses during the downswings.”
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