Your Questions About What Is Happening With The Stock Market Today

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Robert asks…

What’s going on with the stock market/economy today?

Confused teenager here,

I was passively watching CNN and I was passively watching something about the stock market while my mom flipped out. A number was rapidly climbing from -100 to -350. Unfortunately I don’t really know what it means and I’d like to know.

Could someone explain what is happening and what it means for people?

financi4 answers:

As you can see by the VIX, there is a lot of uncertainty driving market behavior. Very similar to market conditions in Fall 2008. The stock market tends to be a leading indicator of economic activity by 6-9 months.

Steven asks…

Should you be worried about the economy and the stock market if you don’t have any stocks in it?

I watch the stock market everyday but don’t really have any money to invest at the moment (which after what happened today with the stock market I’m glad I don’t have stock). But I was just wondering if a recession hurts or helps someone that doesn’t have money invested in the stock market.

financi4 answers:

The Stock Market does not directly impact you if you are not invested in it but its performance can show indication of possible indirect effects the economy. Everything is connected in some form.

For instance, when company profits are down they tend to either cut jobs or at least suspend hiring. This impacts the unemployment rate. People that are unemployed tend to cut back on spending which impacts the earnings of other companies. Those companies see that there is slowing demand and adjust their orders for raw materials or parts which effects the earnings of the suppliers. The folks that deal in raw materials like mining companies slow down mining or drilling operations which lowers the supply of that raw material. The lowered supply increases the price of the raw material. If that raw material is oil then that is reflected in gas prices. Those higher gas prices impact the cost of shipping goods which may in turn increase the price of the product.

Http://familymanfinance.blogspot.com/

Thomas asks…

What’s up with the stock market today Libs…?

…Yesterday all you Libs were boasting all day about it, and saying Obama fixed it….what happened?
Ahh, you Libs are so angry arent you, lol…Your Messiah isnt so great is he?

financi4 answers:

The market goes up. The market goes down. That’s the way it’s supposed to work.

And if you’re a smart little neo-con, today’s the day you’ll be BUYING stocks (since they’re down).

You’re welcome.

Richard asks…

What do you think is going to happen with the DOW and the S&P 500 when they open today?

Right now the news is saying that they are going to open higher based on Federal Reserve Chairman Ben Bernanke’s testimony on monetary policy. However all the other news is bad. I predict that the stock market today will open higher but then start to slide and close lower.

What do you think?

financi4 answers:

I would have agreed with you if it wasn’t for the one fact that 7,000 is now a major psychological barrier and a lot of people will see this a bargain hunting opportunity (because it is very close to that psychological barrier), so I predict it will end about 100pts higher.

Michael asks…

What happens with the stock market now?

So the stock market came roaring back today (Tuesday). What do you make of it?

Part of me thinks this is just mostly people picking up stocks they think are cheap. Once that initial surge of buyers is over with we’ll probably continue going lower. I don’t think there’s a sustained rally in the works.

What do you think we’ll see the rest of the week?
I just heard that the rally is mostly the result of extended low interest rates, which then make it unappealing for people to be in treasuries and bonds. So essentially, by the Fed indicating that they will keep rates low for a long time (hence don’t expect to make much off treasuries and bonds) they are forcing people to go back in to equities.

financi4 answers:

“rest of the week?”…a Bear-Market Rally

Nothing of the economy changed…It’s a Dead Cat Bounce.. It’s a Traders..Swing Trade.

Who knows how high it could go,..but it’s not likely to revisit previous Highs,..Then when it does Sell-off it will blow through yesterdays lows, and eventually cry..Capitulation….Where you would move ..”All In”,..for the long run.

William asks…

Isn’t the recent stock market rally, indeed, a Republican rally?

The forecast is that the Republicans are about to sweep a lot of economic neophyte Democrats out of office, such as Nancy Pelosi, who thinks that giving government (taxpayer financed) checks to all the thousands of unemployed will be good for our economy. (Practicing their economic theory on the job).

Therefore, the expected Republican sweep is good news to the ailing stock market and for slumping business and the employment picture (jobs).

Today, the stock market topped 11,000 for the first time since May.

What do you think?

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I know that there will be those on the left that will be poking fun at this question, but they really believe what they’ve been taught to believe.

That’s OK though.

We can feel sorry for them and can only wish them well as the crap continues to keep hitting the fan right before their very eyes. The amazing thing is that they are completely unaware that this is happening.

When the last shoe drops, there will be a rude awakening when they will be wondering, “What happened?”

Will we share our gathered (hoarded) resources with them? Or will we meet them at our doors with our shotguns? They are our countrymen, after all. I feel sorry for them.

Is obliviousness bliss????

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financi4 answers:

I am a trader and yes, the current rally is speculation that the current administration will be neutered and their anti business platform will be curbed.

James asks…

Stock market (Graph) question.?

I was looking at some graph of a stock.

NASDAQ:GMCR
yesterday the market end with $30.36
but today it the market opened with $31.75
that means it gained %4.58 over night.

How did this happen when market was closed?

and what could cause this dramatic change?

financi4 answers:

A gap open in stocks happens every day, all across the board, whether up or down. It is so common, there are many gap open trading strategies. Just Google “gap open.”

Even before we had after-hours trading, gap open in stocks were common. There are all sorts of reasons people decide to buy at the open, especially if there is some news event during the night.

Basically, it is a liquidity issue when everyone wants to be on the same side at once. If there are tons of buyers at the open and no sellers, then guess what? The law of “supply and demand” DEMAND that the price be put up to accommodate that demand. If there are no selllers, then the market maker has to go short in order to meet the new demand of buyers. He will do that at HIS price, not the previous close. He will sell to you alright, but at a much higher price, then when traders fade the open, he will buy the shares back cheaper than he sold them short.

The phenomena you describe is largely due to market orders at the open, which is really a dumb thing to do, because you could be buying at ANY price. How do you measure the risk for that?

George asks…

After the stock market stuff Monday, what should I do with my 401k?

All I’ve been doing for the past 2 months is working, school and sleeping and eating when i get a chance. i never turn the TV on, so I completely missed what happened on the stock market this Monday. I know NOTHING about stocks, absolutely zip. I have a 401k which was stacking up pretty well with my employer contributing and all. But I looked today and it was $1200 less than it was last week. What do I do? Should I do anything? It’s under a “balanced” portfolio. I have no idea what that means and never changed it for that reason. I read online that the market is already coming back up.. but I’m at a loss. I have no idea what I’m supposed to do.

I’m 24, so I’m not worrying super super bad about it, but I worked for that money and it sucks (as I’m sure it sucks for everyone else out there was a 401k invested in the market)!

Any help would be appreciated.
Yeah, my employee benefits are pretty good, they match 100% up to 4% I contribute. And I’ll be vested next month. So that’s good to know, but this year I’ve paid in about $600 and the crash took $300 of that away. Working part time, I could really have used that money if it were just going to evaporate. But I’m trying to tell myself that, that I shouldn’t worry so much since I’m younger, and the market will go all over the place before I’m done.

I just looked on fidelity.com at my account and what exactly Fid Freedom 2050 was.. it’s a preset blend based on the year I will probably retire (2050). So, I guess it’s ok for now.
Thanks to everyone!! I really appreciate it, my gut told me to just hold off and not touch anything, but I just wanted to read up on it, and as you can see, there is endless info about 401k’s and investing so I came here. And I’m glad I did. Thanks!!! 🙂

financi4 answers:

In short…. Just relax :). I just moved my 401k into a ultra-aggressive model this morning at 9am, and i wound up making $1800 by days end. Don’t worry though, your not day trading so everything shall be okay 😉

Chris asks…

Scared of stock market crashing?

With the DOW losing over 500 points today, what is our probability the stocks crashing to 0? I know we are most likely going into a recession but if the stock market crashes, what will exactly happen? Will a repeat of the great depression occur? I’m kind of worried…

financi4 answers:

People always say “a great depression or collapse will never occur”, but i dont think they understand how real the possibility of other nations refusing to trade in USD is. Right now the USD is the worlds reserve currency and many nations buy/trade resources through it. All it takes is, say, germany to say “we’re not buying our oil in USD anymore, we’re gonna start buying it in yen”, then the USD loses its status as the worlds reserve currency as other nations follow germany and trade in yen, they have no interest in investing or trading in USD anymore as it loses its value and then we are stuck with useless paper that has little value, so the Fed prints up more to pay its debts and causes monetary inflation and so on (germany and the yen were just use as examples). Fortunately, this would ripple and devastate the global economy and investors/nations know this so i dont think this will happen anytime soon, but you can’t be ignorant to the possibilty (and probability is you ask me) of it happening.

Anyway, as far as the DOW plunge today, its definitely not a good sign but it also doesnt necessarily mean we’re heading for collapse. It is a pretty damn big drop, but the DOW fluctuates so who knows, it could jump back up again soon.

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