What's Spooking The Markets.

Ok so here's all the issues spooking the markets and why we've dropped nearly 6% in the S&P 500 in the past two trading sessions.

1.  Over bought after all the giddiness from Federal Reserve Chairman Jay Powell's more dovish comments regarding a possible softening stance on interest rates last week and the 90-day freeze on tariff implementation coming out of the G-20 meeting between China and the US.

2.  Continued decline in the price of oil.

3.  Inversion of certain parts of the yield curve.  {Not enough time to go into this in detail.  Just know that some investors believe this can be a harbinger of a recession or at least an economic slowdown.}

4.  Fears of a slowing US economy.  {Note that a slowing economy doesn't necessarily mean a recession.}

5.  Fears that there was less than meets the eye out of the supposed positive outcome between Presidents Trump and Xi Jinping at the G-20 meeting.  

6.  Algorithmic trading run amok. {Again a topic for another time.}

All of these events have led more to a buyers strike than out and out selling by most investors.  Any  of these reasons, or just a few of them, might have been enough to bring back volatility to stocks.

Next week we'll begin our long promised series on what we think this means going forward.  Here's a hint.  Right now the evidence is not indicative of a recession next year and stocks may be cheap based on what we know today and looking out 12-18 months.  The one wild card to that scenario is China which we'll also discuss in the future as well.

Back early next week.

*Long ETFs related to the S&P 500 and many of the countries listed above via regional or international funds in client and personal accounts.  Please note positions can change at any time    We reserve the right to change these investments without notice on this blog or via any other form of verbal, written or electronic communication.