Hot politics and cold markets have people worried. Hot politics and cold markets have people worried.
                                                                                                     Why Are Stocks Falling and How Far Can They Go? [Wealth Daily] Jason Williams / Jul 25, 2024 That Escalated Quickly Dear Reader, After the past few weeks, one wouldnât be considered crazy to be a little bit shaken and perhaps worried about the future. Weâve had an assignation attempt on a [former president](, the withdrawal of a sitting president from his reelection bid, [escalation of tensions]( around the world, and violent protests in our nations capital (again). And on top of that, after a brief rally following the failure of the assassination attempt, markets have been sliding farther and farther down. Itâs got investors asking [why stocks are falling](. And itâs got them wondering how far they can go. [why are stocks falling] Well, Iâve got some good news and Iâve got some bad news, and you know how that goes. So letâs just get the bad news out of the way right now and talk about how low stocks can go from here⦠How Far Can Stocks Still Fall? The answer to that question isnât really a straight answer. But Iâll try to make it as straight as possible for you. Because stocks could fall a little bit more or a lot more and it all depends on how the market feels about the future about six months from now. Iâll get to that in a bit, but first, letâs talk about the better possibility. Because if markets feel confident about the future, weâre getting pretty close to a very strong resistance level thatâs provided support for them in the past. [why are stocks falling how far] Thatâs a chart of the S&P 500. The green line is the 20-day moving average, a series of averages of price levels over 20-day periods. For most of the year, thatâs been a support level. And it looked like it would be at the start of this drop. But as you can see, weâre through that line and sitting on the blue one now. Thatâs the 50-day moving average. And while it could act as support, itâs not likely to. So the next band the market might bounce back from is the red line, or 100-day moving average. For the S&P 500, thatâs about 2.6% lower. For the Nasdaq and the Dow, itâs about 2% from where the market closed on Wednesday, July 24, 2024. So that could bring buyers back in and stop the bleeding. [âThe Biggest Thing Since Bitcoin!â]( This is the birth of a brand new digital asset... One that could unlock over $867 TRILLION in new wealth... (Thatâs 324 Times BIGGER than Bitcoin) [Hereâs how to claim your stake...]( But if markets donât like what they hear from the Federal Reserve next week⦠or if theyâre still concerned about whatâs going on with the political situation⦠we could see a lot more selling. Because the S&P is only down about 3.6% from its recent peak. And the Dow is only down 3%. A correction is 10% and thatâs something we could see if investors get nervous about the future in the coming days. The Nasdaq 100 is the only index thatâs even close at a 7% drop from its recent high. But thatâs because most of the selling has been concentrated in the Big Tech companies that make up the bulk of that index. - Apple is down 4%
- Amazon has fallen 9%
- Google has dropped 9%
- Meta has crashed 13%
- Microsoft is down 7%
- Nvidia has cratered 13%
- Tesla has plummeted 18% Why Are Stocks Falling? So, now that weâve covered how far stocks could keep going, letâs devote a little time to the reason and talk about why stocks have been falling. Itâs another complicated answer that I hope to somewhat simplify for you. Because a big part of the reason stocks are falling is that markets are uncertain about the future. Theyâre predictive mechanisms. Theyâre not valuing companies based on what theyâre worth right now. Theyâre valuing them based on what theyâll be worth in the future. And when theyâre not sure the future looks so bright, they revalue companies accordingly. They operate on certainty, and when things are uncertain, they act up like impatient children. And things have been pretty uncertain lately. But thatâs not the only reason stocks are falling⦠AI Billionaires Go All-In On This Groundbreaking Tech AIâs massive growth is creating an unparalleled crisis, with energy demand poised to surge 4,900% by 2027. Sam Altman, Bill Gates, and Elon Musk have invested over $3 BILLION in search of a solution... The U.S. Energy Department has backed a tiny firm with the âmaster keyâ tech poised to meet the escalating power needs of our AI-driven future. [Learn more about this little-known stock set to explode here.]( You see, the bond markets are betting that the Federal Reserve is going to cut interest rates not once, not twice, but three times between now and December. And now the rumors Iâm hearing say people are starting to think we might be in for an extra one starting next week. Theyâve got good reason. Inflation data has been coming in the way the Fed wants it to. And at his testimony before Congress and his recent speaking events, the Fed chair has been talking more about employment. Thatâs the Fedâs second mandate â to keep unemployment low. And it canât fight inflation and unemployment at the same time. But if the Fed chair is worried about unemployment growing, then that means he must be worried about the economy slowing. And if the economy is slowing, then those Big Tech companies that were going to be so incredibly valuable in the future just got a little less valuable. So stocks are falling for a few reasons. Theyâre a complex system made up of machines and humans, investors and traders, buyers and sellers⦠Thereâs never one reason for them doing anything. But one reason they always fall is that uncertainty I spoke of earlier. If youâve been watching them long, then youâve already seen that markets can price in both good and bad news. Itâs when they donât know what the news is that they have trouble figuring out where the future is heading. What Should You Do? Now, Iâm sure there quite a few investors asking what they should do with stocks falling. Especially now that Iâve told you theyâve got the potential to fall either a little or a lot more. So since I canât be helpful telling you how far stocks definitely will fall from here, Iâll do it another way. Iâll tell you what you should do. But first, Iâll tell you what you shouldnât do. And what you shouldnât do is listen to anyone whoâs telling you to sell it all and get out of the markets. If youâve lost confidence in your investments, by all means, sell them. But only if something happened to change the reason you invested in them to begin with. First, [timing the markets]( is a fools errand. The majority of stock traders lose money. And the majority of internet influencers who claim theyâre in the minority make the majority of their money by charging naive people for trading programs. And second, the biggest rallies come before the worst crashes. The people who were sitting on the sidelines watching markets go up all year are finally getting a chance to âgo back in timeâ and buy low. What you should do is [get on our mailing list]( if you havenât already and [download our app]( (shameless self-promotion), get invested in [the sectors that do well]( no matter what the stock market does (diversity isnât just a buzzword), and become a member of our investor chat on [Discord]( to exchange ideas with other like-minded fortune-seekers. Iâll be back soon with some information on some stocks that are bucking the trend and rising while markets fall. To your wealth, [jason-williams-signature-transparent] Jason Williams [[follow basic] @TheReal_JayDubs]( [[follow basic]Angel Research on Youtube]( After graduating Cum Laude in finance and economics, Jason designed and analyzed complex projects for the U.S. Army. He made the jump to the private sector as an investment banking analyst at Morgan Stanley, where he eventually led his own team responsible for billions of dollars in daily trading. Jason left Wall Street to found his own investment office and now shares the strategies he used and the network he built with you. Jason is the founder of [Main Street Ventures](, a pre-IPO investment newsletter; the founder of [Future Giants](, a nano cap investing service; and authors [The Wealth Advisory]( income stock newsletter. He is also the managing editor of [Wealth Daily](. To learn more about Jason, [click here](. Want to hear more from Jason? [Sign up to receive emails directly from him]( ranging from market commentaries to opportunities that he has his eye on. [Feedback? get in touch](mailto:/newsletter@wealthdaily.com?subject=Wealth%20Daily%20feedback) [Read this email online]( [Manage Newsletters]( [Share on Twitter]( You signed up for our newsletter with the email {EMAIL}.
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