Thursday, 18 May 2017 00:00

The Stock Rout is a Wake Up Call

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(New York)

Everyone’s fears over valuation and low volatility came to a head yesterday as stocks imploded alongside increasingly intense allegations against Donald Trump. The Nasdaq fell almost 2.6%, while the Dow was down 373 points. Barron’s says this should serve as a wake up call to investors. Stocks have risen strongly on the back of expectations for tax and growth reform that has not even taken a definite shape, let alone been passed or enacted. Soft economic data, along with stocks, is moving downward, reversing previously held growth expectations. Treasury yields are also falling, a classic sign of slowing growth.

FINSUM: The path of markets may have fundamentally changed yesterday. Doubts about Trump’s ability to create change had been increasing, and on the back of the latest scandal, they are surging.

Source: Barron’s

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