Mortgage Rates Fall Below 7% In Rare Sign Of Relief For Homebuyers
ForbesMAR 14 2024
Stock markets witnessed a rout the world over on Thursday and Friday, fearing a potential recession in the US reportedly due to the Federal Reserve's delay in cutting rates.Global stock markets tanked overnight Thursday into Friday following the release of a key US manufacturing survey and jobs report — both of which fell below market estimates.
On a particularly volatile day in the US, the Dow lost over 494 points (1.2%), the S&P 500 declined 75 points (1.37%), and Nasdaq 405 points (2.3%).According to a Thursday report from the Institute for Supply Management, US manufacturing — which makes up 10.3% of the economy — hit an eight-month low, with the Purchasing Managers' Index dipping to 46.8 from 48.5 in June. Any measure below 50 suggests a contraction in the market.
Friday saw the second-largest drop in the history of the Nikkei stock index as it fell over 2.2K points (5.8%) reportedly amid talk of more rate hikes in Japan.Meanwhile, Friday's jobs report showed a slowdown in hiring in the economy and an unemployment rate of 4.3%, reportedly the highest in more than two years.
Recent declines in the US stock market were an indication of a potential shift and the coming end of its bull run. High interest rates have hurt debt-heavy companies and smaller businesses are facing declining revenues. Political and economic uncertainties do not exactly create optimism. Most US stocks have not reflected the economy's once-exceptional economic growth for a while.
A correction was only waiting to happen after the US market's bull run. Stock market crashes aredon't rarehappen often, and the current situation doesn't suggest an imminent crash of a major kind. Investors should focus on maintaining diversification, balancing portfolios, and sticking to long-term plans, as history shows that market dips often present valuable buying opportunities.