For the past several quarters, the stock market has been very volatile due to the financial issues in Europe and issues in the Middle East. Recently, the stock market has taken a hit as fears of France and Spain entering the crisis increase.
As we learned in the “Finance and Crisis” class, the main reason stock prices are falling are because of the expected returns in the future, mainly from dividends. Several U.S economists fear an unproductive future,”It is stunningly easy to slip into recession, ” says US Chief Economist at RBC Capital Market. Economist fears are infecting most of the population. Investor expectations about the “expected returns” in the future are not looking good causing stock prices to fall rapidly. The troubles in Europe have caused many investors to feel unsafe in the Stock Market and thus they are pulling out, trying to minimize losses. The market has experienced a seven month low which may indicate a crisis in the near future.
Recent turmoil in the market can help us understand clearly how a crises on the opposite side of the world can influence markets on a global scale.
http://www.thestockmarket4u.com/
Articles Link:
http://bottomline.msnbc.msn.com/_news/2011/11/20/8913235-a-short-topsy-turvy-week-awaits-wall-street