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Dow Plummets ... No Worries

Saturday, February 3, 2018 1:57

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By Douglas V. Gibbs
Author, Speaker, Instructor, Radio Host

What goes up, must come down. When something goes up in the way the Stock Market has been, it was bound to have a correction. Considering how much it has been soaring since the election of Donald J. Trump, while the 666 point plummet has been disconcerting (and the worst in a week the Dow has done in 2 years), the market still sits above 25,500.

It was also the first time since June 2016 that the Dow fell at least 500 points.

While the week has been rough on the screaming heads on Wall Street, and the day has been even more horrendous for them, once again, in the world of the Wall Street casino, rises require drops, and soon there will be a rise, again.

The experts are concerned there will be rising interest rates. Prosperity encourages lending, which encourages higher wages, which encourages rising rates, which kills the very animal pushing the market ever higher. it’s a reality of economics, and playing the game of buying and selling, I suppose.

The thing is, the hiccup we just experienced, when you look at the large, overall picture, is but a minor drop.

CNN, MSNBC, and the rest of the hard left media outlets spent their entire morning broadcasts worrying about the tragic drop in the Dow, how it must be a result of Trump’s bad policies, and all the time they were ignoring the release of the Nunes Memo, which Fox News was all over.

From the leftist media’s point of view, the more than 500 point drop of the market was a sign of economic Armageddon, even though it was nothing compared to the slides experienced during the Obama administration (especially early in his presidency). Besides, they needed a distraction away from the memo, until the Democrats could pull together a narrative killing what the memo suggests.

What isn’t being reported by the leftist news media is that the U.S. economy added 200,000 jobs in January, according to the Bureau of Labor Statistics. Economists polled by Reuters expected growth of 180,000. Wages, meanwhile, rose 2.9 percent on an annualized basis.

The report, however, also sent interest rates higher, hitting a four-year high.

“The reaction in the bond market is due to the rise in average hourly earnings,” said James Ragan, director of individual investor group research at D.A. Davidson. “I think the market is now thinking of the possibility that the Fed could raise rates four times this year rather than three.”

The Federal Reserve has forecast three rate hikes for 2018.

“We’ve been expecting a pullback for a while, said Gene Goldman, head of research at Cetera Financial. “Yes, earnings are strong and the economy is doing well, but markets just don’t go straight up.”

Besides, the rise of economic prosperity is in its infancy under the leadership of President Trump. The labor participation rate still remains at 1970s levels, and the battle to pull us out of the hole that Obama and the Democrats have dug is still in play. One thing is for sure. The improvements will come, the prosperity will be engaged, and it will largely be the result of the recent tax reform law – - and between now and November the voters will begin to notice that they have more money than before. The real question is whether or not that will translate into votes for the GOP. If it does, the mid-term the Democrats are expecting will be like the presidential election for them — very disappointing.

– Political Pistachio Conservative News and Commentary

Source: http://politicalpistachio.blogspot.com/2018/02/dow-plummets-no-worries.html

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