Before Friday, U.S stock markets were still in a very bullish mood after stellar gains in 2019.
After a recent number of positive data sets such as good employment, good company reports, revised GDP (up) and the Fed’s helping hand, markets remained extremely bullish.
The FOMO brigade took over pushing the Dow, S&P 500 and Nasdaq to all time new highs. What was not to like?
Mood swing
Then the party mood changed dramatically as a U.S. air strike in Iraq killed a popular Iranian military commander. The mood changed. The air strike has potentially pushed the U.S. and Iran closer to conflict.
Finally these bullish U.S. markets have something to be concerned about and the brakes have been applied. Overnight the Dow dropped and continued a downward trend on Friday.
Time to worry?
The world has just become less safe as more uncertainty and instability returns to Iran and Iraq.
With stocks near record highs, and with companies with high valuations – they will need to show sensible good growth. Is this likely with in next round of earnings data? Many have large debt piles and debt is fast becoming a ticking time bomb waiting to explode!
Cheap money
Debt is cheap and there is plenty of it in some U.S. companies. I worry that this will become the next issue to fear.
The U.S. attack has made investors sit-up and take notice. It’s a shame though that it has taken the consequences of such action to pull the markets up to take stock!
Monday has seen the Dow recover some it’s losses – but will this recovery continue?