Wednesday, 31 August 2016

Markets mixed, faces risk of significant selloff

Markets were mixed again on Tuesday.

The S&P 500 fell 0.2 percent and the Nikkei 225 slipped 0.1 percent but the STOXX Europe 600 rose 0.5 percent.

US crude oil fell 1.3 percent as the US dollar rose for the third consecutive day.

“By all appearances, the move down in the market today is driven by a stronger dollar and heightened expectations of a rate hike by the Fed this year,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management.

However, some analysts think that the Fed will not hike in September.

Kully Samra, managing director at Charles Schwab, said: “The economy is in a strong place—they’re in a strong place to hike in September—but given the track record we’ve seen, I think it’s unlikely.”

Still, now may not be the best time to buy stocks.

Mark Hulbert at MarketWatch reminds us that September is the worst month for US stocks while Michael Brush, also at MarketWatch, says that there is likely to be a significant selloff over the next two months.

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