Cautious investors are looking for signs that the market will have an upswing around the holidays, as concerns that volatility will force massive sell offs. Monday’s openings show more slipping with all market indexes showing a drop in points, so despite optimism in the strength of the market many remain on edge.
December continues to be a month in which markets are down, now at a 17 month low. Many investors are anticipating announcements from the Federal Reserve, which will meet Wednesday to come to terms on interest rates for the upcoming sessions. Investors are hoping that a trend of increased interest rates will slow down, in order to keep them low as a way to stimulate sales and buying of stocks. The Federal Reserve raises interest rates in order to prevent markets from overheating and inflation low, but some worry that steeply raising rates will shatter investor confidence and work against the still-strong US economy.
And while the economy remains robust, investors and consumer confidence is still on edge. US and China’s tentative trade relationship, Brexit concerns, and a slowing global economy are working against faith in the market. While 2018 was a strong year for the stock market, cracks in the foundation are starting to concern many investors that a recession will hit hard in the next few years if certain aspects of the market weaken. Many are looking for signs similar to the 2008 collapse in order to prevent such a recession.