It’s been a rough week and an even rougher month for a lot of companies on the stock market. Like I discussed in my previous blog, “Are We About to Have a New Crash in the Stock Market?“, fears about rising interest rates and inflation have caused a lot of volatility on the stock exchange. These fears have been further complicated with rising interest rates in the bonds market and 10-year yields topping 1.54%. This is the highest level since the Covid-19 pandemic began.
Once again, Federal Reserve Chairman Jerome Powell addressed these concerns. At the Wall Street Journal Jobs Summit, he acknowledged that he expects the economic reopening to cause some temporary inflation but that it would not be enough to make the central bank raise interest rates. While Mr. Powell continues to try and ease investors minds, investors are having a “crisis of confidence” with Powell and the Federal Reserve. Investors fear that the Fed is misjudging the speed at which the economy is moving and they are underestimating the level of inflation and the impact that it will cause.
These uncertainties in the financial world have caused a lot of volatility on the stock exchange, with the tech sector being the hardest hit. For example, Tesla stock prices went from highs around $875 just a month or two ago to dropping below $600 as of recently. Apple’s stock price went from a high of $144 about a month ago down to around $120 today, which in another example of the tech sector’s drop. Many argue that the tech sector experienced excessive rapid growth over the past 4 months and this is the market correcting itself. What are your thoughts? Leave me a comment on whether you think this is the start of a market crash, especially in the tech sector OR is this just a great opportunity to buy the dip?