The New York stock exchange is falling after new figures on rising unemployment and an unexpected slowdown in the manufacturing industry in the country.
And that is the primary explanation for the current global stock market anxiety, according to Frida Bratt.
This creates anxiety among investors regarding the American economy, she says.
Shift on the market
But we are also seeing a shift now in how the market is behaving, says Frida Bratt. Previously, the market has reacted positively when weak economic data has been presented – but now it has turned.
One has looked forward to interest rate cuts when weak economic data has been presented. But this time it is overshadowed by the fear of recession.
That is, the low-conjuncture in the USA will be deeper than initially thought.
According to Frida Bratt, there is anxiety that the American central bank Fed has done too little and therefore will not be able to rescue the economy with upcoming interest rate cuts.
Then maybe one has to make panic interest rate cuts instead. The market likes lower interest rates, but the interest rate must be cut for the right reasons – not make panic cuts because the economic situation is so bad.
Continued anxiety
Even though this is the primary reason for the stock market crash, there are several other things that also affect.
Among other things, the situation in the Middle East – but also how the big American tech companies in "The magnificent seven" are doing.
It may not be as quick to get returns on these AI investments, which the tech companies have made. And they are so important – especially for the American stock exchange.
And Frida Bratt believes it may take time before it turns.
It may be quite anxious until we get further information about the economy and how Fed will act in this situation. But one should not forget that it is not unusual for the stock exchange to decline after periods of growth.
