Why is the stock market tanking today?

[madaboutharry]

Could this be due to the memo? Today is just another dysfunctional day in America.

[spanone]

1. interesting...jobs numbers are higher than expected...?

[unblock]

7. this is seen as not good for corporate profits.

the labor market is pretty much at "full employment", meaning additional demand for labor might actually lead to wage growth, which means corporates can't keep all the gains for shareholders.

[spanone]

9. poor babies.

[unblock]

10. i think i hear them clamoring for another tax cut already....

[spanone]

11. any moment now....highest corporate tax rates in the universe

[RKP5637]

27. Yep, 10, 9, 8, 7, ... The damn taxes are too high! It will happen. n/t

[Yo_Mama_Been_Loggin]

33. And Trump will try to make the case for subsidies instead of taxes

[RKP5637]

34. OMG, plausible ... Yep, subsidies for tRump properties. n/t

[Flaleftist]

2. It may be time for a correction.

It’s bound to happen sooner or later. Quick gains are only sustainable for so long. The question is how will the right blame Democrats for it?

[leftynyc]

3. The economy is in good shape

which mean interest rates will be rising. That always send stocks down.

[Yavin4]

5. This

As unemployment drops, wages inevitably have to rise as companies are going to find it difficult to fill positions and thus, have to raise wages. That's going to lead to higher than expected inflation which means that the Feds have to raise rates which will lead to higher borrowing costs.

So, that Trump tax cut will be spent on higher interest payments on credit cards, student loans, and mortgages.

[leftynyc]

6. Another reason the

"middle class" tax cut was nothing but an illusion.

[RKP5637]

36. Yep, fed the idiot factor in the US that tRump is with them, their man, just like them. n/t

[DemocratSinceBirth]

16. Unless the rise in income is matched by an increase in production which is unlikely.

[Yavin4]

17. At 4% (and dropping) McDonald's will soon have to compete with Burger King for workers

As will all companies.

[lagomorph777]

4. They know the memo will make their Dear Leader look like an autocrat.

Can't have the little people (401k chumps like us) knowing the truth.

[Algernon Moncrieff]

8. Profit taking - Merrill Lynch/BOA advice to clients to sell

LINK

The frantic dash into stocks has hit a boiling point, causing a reliable indicator from Bank of America Merrill Lynch to flash a sell signal Friday.

High levels of investor enthusiasm can be a bad thing when it comes to financial markets, as too much money can push valuations out of whack. BofAML's historically reliable indicator is pointing to just such a period.

The firm's strategists say overheated bullishness tripped its "sell" indicator Tuesday, in the early stages of what has been a rough week. When all is said and done, technical indicators point to a level of 2,686 on the S&P 500, which would represent a nearly 5 percent drop from Thursday's closing level, BofAML said in a note to clients.


This is the 12th time that the "Bull & Bear" indicator has indicated a "sell" position dating to 2002, and each time has been accurate, the firm said in a note last week. The average peak-to-trough return is a drop of 12 percent.

To be clear, a 12% selloff over the course of several weeks would be normal, and the article goes on to say that it's not all bad news.

[titaniumsalute]

12. Nothing to do with the memo

The combination of a "too hot of a market" coupled with potential inflation concerns.

[Bragi2]

13. Real wages increased

That can't be good for stock prices.

[NCTraveler]

14. There are a handful of reasons why.

The one to watch int the coming year is home builders, lending companies, and loan holders. In most areas in the country there is going to be a adjustment in home prices. Not all areas, but most. This adjustment will look nothing like '08. It will still be dramatic.

Lots of major things going on and I'm not sure if anyone knows how it's all going to shuffle out. Seems inflation is the one thing everyone is currently agreeing on.

[ffr]

15. It tanked a couple days ago, but not this bad. Maybe signs of 2007 revisited, where it swung wildly

Govt is losing money due to GOP tax cuts.
The goodwill the red state voters felt from getting revenge in 2016 is wearing off, now that reality is setting it that their savior is the demon himself.

If it is 2007 revisited. Do the math and get into safe haven investments or at least plan that way.

[flamingdem]

18. No, not 2007. We're not in a recession

so no real signs of that, just a slightly overheated market and rising interest rates.

Overall the world is in good shape economically compared to other eras.

[ffr]

19. ...yet. There's very little holding this bubble together without a thriving middleclass.

Employment numbers are already lagging behind, as indicated by Q4 2017's mediocrity.

[flamingdem]

20. 4% and dropping?

The issue is too much employment and pressure for higher wages that leads to inflation/lower stock prices

[ffr]

22. And unchecked government spending, compounded by a gutting of revenues: GOP tax cuts?

$20.5T in public debt outstanding with a government that's pouring fuel on the printing presses.

I'm not going to discount your point, but my point is, the fundamentals of this economy are not sound.

[flamingdem]

23. Fair enough.

That's going to hurt for sure.

[cbdo2007]

21. The market doesn't like political uncertainty...

And the memo certainly creates that.

My read on this is that the financial markets think the memo pushes us significantly closer to impeachment, which will ultimately bring the major correction we have been expecting which I would guestimate at 15-20 percent.

[lunasun]

24. Bond market

http://money.cnn.com/2018/02/02/investing/stock-market-today-dow/index.html

[Hamlette]

25. fear of inflation always causes the market to "correct" to bear status.

especially wage inflation as mentioned earlier. But inflation in general causes interest to go up so people leave the market to invest in bonds and savings. The market is cooking in part because interest is so low. If you can get say 10% interest in a federally insured bank account you'd leave the market so a more sure bet. Or at least I would. Interest is presently at a max of 2% (if that) and the market is up 30% in a year. Probably time to move.

[Sophia4]

26. The stock market is a big bubble right now anyway.

That is my opinion.

[Wellstone ruled]

28. How about the fact that a Budget Deal

is not about to happen because of what happened this morning. Secondly we are now seeing the increase in the deficit blowing the Debt Ceiling out of the water. We are at some 1.8 Trillion and growing with a 1.5 Debt Ceiling previously agreed to..

We are headed to a Government Shut Down next Friday.

[Yonnie3]

29. Profit taking.

Expectations of corporate earnings have lessened for several reasons that are given in posts above.

I would not characterize a 1~2% market pullback as tanking.

[customerserviceguy]

30. There's worry

that rising wages will cause the Fed to jack up interest rates, and that will be bad for the stock market.

[redstatebluegirl]

32. Wait until all the Trumpers buried in credit card debt see their minimum payments

go through the roof, will they blame the democrats and Obama for that too?

[redstatebluegirl]

31. I doubt this will be the last "correction", the market is just strange right now.

We made some adjustments a few weeks ago because we were afraid something like this was coming down the pike.

[TNLib]

35. Bond market and worries on inflation

For some reason the stock market doesn't like wage increases and low unemployment it cuts into corporate profits and flames concerns about inflation. There is also a stock bubble and a bond bubble so a correction is needed.

Basically too much exuberance in the markets for the past year.

[Initech]

37. The rest of the world is laughing at us.

This is what happens when you let a hostile foreign intelligence entity calling itself a "news network" dictate policy for 20+ years.