Wall Street and the JSE
The shock 2,5% drop in the S&P500 last night is a clear indication that the correction, which has been in progress since 26th January 2018, is not yet over. President Trump imposed about $50bn worth of tariffs against China, reigniting the prospect of a trade war between the two largest economies in the world. The point to notice is that this is a new issue in the correction which was not there on 26th
US Economic Boom
The current correction on Wall Street has two primary causes:
- The rise in the level of wages last month which made investors scared of a much more hawkish stance by the US Federal Reserve Bank’s Monetary Policy Committee (MPC), and
- The fact that the market had just run too hard for too long and some sort of a breathing space was both necessary and healthy.