Death By A Thousand Cuts

Death By A Thousand Cuts

As the markets fell again today, a lot of analysts found themselves wondering why markets have been down lately despite a lack of obvious reasons to blame. The answer is that markets are being suppressed by a mix of different factors, including some seasonal weakness and problems overseas.

All of the factors have added up to skittish investors and falling markets. There is systemic weakness in Europe, as indicated by Germany’s DAX being down 22% this year. There is also the issue of the Fed, and the fact that they’ve largely missed their chance to act.
Finally, markets in Asia are unpredictable, and China is downright dangerous right now.

So when you find yourself wondering why markets haven’t been able to sustain any gains this summer, don’t look for a single factor. The fact is that markets are lower because of a handful of causes, both foreign and domestic. All of them taken together comprise the death by a thousand cuts that we’re currently experiencing.

China’s President to Meet With US Business Leaders

Chinese President Xi Jinping landed in Seattle today, kicking off a business-oriented trip to the United States. Tomorrow he will meet with a group of CEO’s led by former Treasury Secretary Hank Paulsen. The meeting is expected to be a wide-ranging discussion of the Chinese economy, Chinese consumer demand, and American supply and demand to and from the communist country.

The meetings are important because of the sheer amount of trade that takes place between our two countries. China is the number one trading partner for the United States, and we import tons of good from the country every year. Despite this, there has been a remarkable lack of transparency from China when it comes to their economic policy. A lot of analysts and businessmen hope that President Jinping’s will clarify their position in relation to ongoing trade with the US.

Biotech Continues to Drop

The bottom has fallen out of the Biotech sector recently, and it’s still falling. There has been controversy in the sector recently, as a drugmaker recently bought an established drug and then raised the price of a dose by more than 5,000%. The controversy eventually invited comments from Presidential candidate Hillary Clinton, who spoke out against the sort of price inflation that has run rampant in the sector.
Published on Sep 22, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2016. Content published with author's permission.

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