There is global stock market anxiety. The Tokyo stock exchange had its worst fall since "Black Monday" 1987 during the night. European stock exchanges also plummeted during the day, and in the USA, it continued to fall when the stock markets opened.
According to Peter Malmqvist's analysis, it could get much worse. If we were to see a fall of more than 12 percent on the American stock exchange within the next two weeks, it could get bloody on the stock market, he believes.
When people read these articles about the falling stock market, it creates anxiety. Especially among those who have recently entered the stock market.
And if fund savers start withdrawing their money and putting it in the bank instead, it could get really uncomfortable.
Hitting the Stock Market Hard
This would lead to a broad decline on the US stock market, according to Malmqvist. He believes we could see a fall of 20-25 percent - from when the American stock market was at its highest on July 16.
But so far, this is not the main scenario, but it may be a 40 percent probability.
According to Peter Malmqvist, this would hit the Stockholm stock exchange hard.
If the American stock exchange passes 12 percent, then the Stockholm stock exchange will also fall by the same amount.
What could be required for stabilization is for the American central bank, the Fed, to start signaling a more significant interest rate cut than expected in September, says Malmqvist.
Then it could bounce back 3-4 percent directly, and people would immediately become more calm. But I don't think the Fed will come out and say anything.
Not a Buying Opportunity?
But other experts are more optimistic.
Lars Söderfjell, stock manager at Ålandsbanken, believes that the anxiety on the stock market will calm down within a few weeks.
It's very rare that it lasts for so long. But I don't think it's a buying opportunity on the stock market yet. Instead, I think you should wait and see in this situation.
But Molly Guggenheimer, stock strategist at Danske Bank, believes that it could become a buying opportunity on the stock market soon.
I would have sat calmly in the boat for a few days anyway. I think it will calm down pretty soon. It could become a buying opportunity in a few days again, she says.
But when the stock market eventually turns upwards again, there is a risk that the effect will not be as strong as in previous corrections.
When the stock market falls in a strong macro period due to, for example, increased inflation, the bounce back is often significant. But when a correction comes in a weaker macro period, like now, the bounce back is usually not as strong.
