Market Volatility Remains High Despite Tech Stock Correction
The recent correction in overvalued US tech stocks has done little to alleviate market concerns. While anxieties surrounding the economy remain present, particularly in the United States, interest rate cuts are expected to be implemented. However, their efficacy in boosting market growth remains uncertain.
Portfolio manager Jens Herdack of Weberbank anticipates ongoing volatility, citing the ongoing bear market phase that began in August and the unique challenges of the holiday season. Increased market volatility is likely due to “chambers of commerce that are not occupied by many people due to holidays.”
As the reporting season concludes, investors will closely monitor upcoming economic data, including the Empire State Index, Philadelphia Fed Index, and initial unemployment insurance claims, for potential signs of a recession.
Limited Scope for Interest Rate Cuts
Inflation remains above the Federal Reserve’s target of two percent, limiting the potential for further interest rate cuts. The release of producer and consumer prices in July is expected to garner significant attention.
Economic and Political Uncertainty Persists
Concerns surrounding the political tensions in the Middle East continue to weigh on market sentiment. The potential for retaliatory strikes against Israel following the killing of prominent Hamas and Hezbollah figures adds further uncertainty.
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