Last week’s stock market gyrations had the media all in a tizzy — for all of a day. By Tuesday, markets had more or less rebounded, and now it’s as if it were all a bad dream. IT MAY seem contradictory for a newspaper to tell readers to ignore the headlines, but when it comes to the stock market, rarely does its ups and downs reflect the state of the nation’s economy.
The brief panic is why the ups and downs of day-to-day trading are not really news. The markets are inherently designed to fluctuate. And last week’s dip, market analysts say, was long overdue.
A more reliable pulse of the market’s health is when it’s taken from a months-long perspective, or better yet, years out. Over the past five years, for example, the overall value of investments in the stock market are up 200 percent.
But judging from news reports and politicians, the sky was falling. For the most part, people laid blame for the blip on China, whose equity market is realigning. Mind you, its overall economy is still enviably robust, experiencing 5 percent growth.
Republican presidential candidates stood in line to lay the blame squarely on President Obama.
Scott Walker, R-Wisconsin, requested Obama cancel a meeting with Chinese President Xi Jinping, saying Obama needs to gets a “backbone” when it comes to U.S.-China relations.
Donald Trump maintains “poor planning” by the Obama administration has allowed “China and Asia to dictate the agenda,” though he would not elaborate what he suspected such an agenda contained.
And Chris Christie, R-N.J., said the cause for last week’s tumble was due to U.S. debt to China. “If the Chinese get a cough, we get the flu,” he said, as if the two were even remotely connected. With China as banker, it obviously is sitting pretty. What would truly pull the rug from under the United States is if China tightened its purse strings. And here in the U.S., the price of borrowing money still remains a bargain. Interest rates can’t get any lower.
It’s also ironic that a bear market is overwhelmingly viewed as a bad thing. If you’re in the market to buy, cheaper stocks are a good thing and could be a boon to emerging markets.
Of course, all this talk should make no difference to most Americans. Less than 15 percent of the U.S. population owns individual stocks, according to the Federal Reserve.
So when you read this morning’s headline, “World markets wobbly Wednesday,” regard it as a delightful tongue twister.
— Susan Lynn
Market roller-coaster took us on a ride to nowhere
