Friday, June 21, 2013

Is the Drop in Financial Markets an Overreaction or an Early Innings of a Sell-off?

From CNBC:  Stunned investors are now wondering whether the markets' big selloff was an overreaction or a sign of more volatility to come.  Global financial markets plunged Thursday after the Federal Reserve roiled Wall Street by saying it could reduce its aggressive economic stimulus program later this year. Concerns about China's economy heightened worries.

The global selling spree began in Asia and quickly spread to Europe and then the U.S., where the Dow Jones Industrial Average fell 353 points, wiping out six weeks of gains.  But the damage wasn't just in stocks. Bond prices fell, and the yield on the benchmark 10-year Treasury note rose to 2.42 percent, its highest level since August 2011, although still low by historical standards. Oil and gold also slid….

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