Today is about the 4th day in a row that the markets have been dropping. This time, the blame was placed on the Core CPI (inflation measured without food & energy prices) report that was released today. It said that core CPI was up 0.6% last month (it was up 0.4% last month). Therefore, investors had an excuse to be bearish today. Today? What about the past 5 trading days?
Today's excuse is the media looking for a reason to explain the situation, but it's a short-term explanation for a long-term view. Stocks have been falling since the day after the Fed released it's latest rate increase last week! AND has anyone noticed that the commodities are also falling, including gold? Today, I finally heard someone say that the money is flowing into bonds, but that wasn't the case before today. Hmmmm....
Speaking of the Fed, Chairman Ben Bernanke made a speech today saying that the government should stay OUT of hedge fund regulation. HOO-RAH Ben! Score one for the free-market capitalists against "creeping socialism" and beaurocracy! By the way, the Federal Reserve Bank is NOT a government entity. Ben Bernanke does explain and discuss the situation with the President of the United States, but he doesn't report to him.
However, the Fed is not a friend of Wall Street. Every talking head on Wall Street has been griping about the Fed's rate increases (9 in a row, now) and how it is stifling the economy. Today, I heard them say that it may be too late to save the economy after this last increase. Is THIS the sentiment that caused the Down-200 day?
While the markets have been falling, the dollar has been rising against the Yen and the Euro. My guess is this is because people are cashing out of overpriced stocks and holding cash and US bonds. I bet foreign investment may have a play, too. They might see prices falling and could be converting their currency to dollars to buy up more American opportunities.
Just remember, the market is falling, not the country. We still have fundamentals, so what goes down WILL come back up!