Are the stock market declines inevitable?

Team Veye | 09-Mar-2020 stock market declines inevitable

Amidst the continuing string of deaths not only in China, falling stock markets and emergency rate cuts by banks, but it is also time to consider the ultimate economic impact of the coronavirus globally.

The widespread damage is not limited to the only disruption of the global supply chain thus causing wholesale shortages. Many other sectors including the travel and hospitality industry have also felt the heat.

The Governments worldwide have responded to this challenge on a war footing. With all the precautions and preventions everywhere, the good news is that the number of new cases in China has begun to fall.

The market fall had somewhat retreated earlier on the prospect of coordinated policy action from the world’s big economies. Central banks of Australia and Malaysia cut interest rates on Tuesday last week. The Bank of Japan also injected liquidity into the country’s financial system with the Bank of England showing its readiness to support the economy.

After the Federal Reserve’s interest rate cut failed to cut much ice, market participants turned up the heat on it to do even more. Fed policymakers may allay some fears, along with forecasts for economic growth, at the end of their March 17-18 meeting.

The Fed has a long history of coming to the market’s rescue with rate cuts and stimulus. This should, hopefully, instill some confidence in the market.

The action by central banks world over may not provide an immediate remedy to the affected sectors and broken supply chains but may help support overall economic activity.

While nobody can predict the exact behavior of the stock market, we all know it has its ups and downs. Sometimes unexpectedly though.

For investors and medium-term traders, such things could be a non-issue. In the past many years, almost all the markets have had significant drops, neither of which was lasting. In fact, some of these have registered handsome gains.

Disclaimer

Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.

veye logo

Grab Your Free Report On 5 ASX Dividend Stocks To Buy In 2024

(+61)

SALE IS LIVE

Limited Time Deal:   Over 72% OFF

DIVIDEND
INVESTER REPORT

Dividend-Investor-Report

Each week we cover companies offering a good combination of growth & dividends, maintaining a balance between stable 'cash flow' and risker 'raising stars'. Our guidance helps you choose companies with regular dividends and opportunities for lower-risk capital growth.

  • The best High Yield Dividend Stocks picked by our team of analysts every week.
  • Detailed in-depth Analysis with our expert Recommendations Buy, Hold or Sell.
  • Free Daily Analysis Report to keep up with the latest on what's hot and what's not.
  • Gain instant access to a wide range of Dividend Share Reports, exclusive to members only.
Frequency: Every Tuesday