Wall Street recent announcement of the decrease in stock market showed their worst year since 2008. This is shown by the S & P 500, which is the Standard & Poor’s 500 index. The S&P 500 weights stocks to their proportional market value. During this year, 6% of the value of the S & P 500 was eliminated. This was affected by many current global crises that have influenced the world economy.
One of them is the turbulence in China, China’s factories have been suffering of low productivity. In which, the Purchase Manager’s Index has been for seven consecutive months below 50, representing a manufacturing deceleration. The poor activity of factories in China have influenced in the current health of the suffering Chinese economy. The government is still trying to accelerated projects and establish funds to help overcome this situation. Another of the major issues affecting the S& P are the crash in oil price and the slowdown in earning growths, factors such as this are scaring investors away from the market.
After this terrible 6% decrease in the S&P 500 the market will hopefully rise back to 3% and end the year with 2% lower than how it started, but this is still lower than the 2008 economic crisis. And as Russ Koesterich—global chief investment strategist at Blackrock—mentions in the article “There is a lot of pessimist driving prices…making it an uninspiring year for the U.S. stocks.”
References:
Egan, M. (2015, October 3). Brace for worst year on Wall Street since 2008. Retrieved October 4, 2015, from http://money.cnn.com/2015/10/03/investing/stock-market-worst-year-since-2008/index.html?iid=TL_Popular
Riley, C. (2015, September 30). China’s factories are still struggling. Retrieved October 4, 2015, from http://money.cnn.com/2015/09/30/news/economy/china-pmi-manufacturing/index.html?iid=EL
