It was not quite Black Monday, but it was gloomy enough. At one point there was very little respite for reeling global investors. Major stock markets had all tumbled, the gold price sternly corrected, crypto assets buckled and, for local investors, the rand had taken a tumble.
By Tuesday things were looking a little more settled, but a great sense of unease still lingers. The skittish trade patterns on the US stock market in what has been dubbed “Manic Monday” certainly tell a story, and might be a portent of hectic episodes to come.
After the rout in Far Eastern markets and Europe, investors looked to the US market opening with some trepidation. Interestingly, equity markets see-sawed violently. Rumours that US President Donald Trump would offer a temporary respite on his new tariff regime drove the market up, and their subsequent dismissal as fake news unceremoniously sent it down again. A desperate, and dangerous, look for direction if ever there was one …
No doubt there will be much more volatility in the coming weeks. The US markets, where valuations in certain sectors are still heady, will remain on hair-trigger alert for further downward corrections. Doubtless, more rumours will fly.
Right now, a few old market bears are rubbing their hands in glee, reckoning the pricking of one of the biggest market bubbles might be under way. If that’s the case, then it might be a wild few months — rather than weeks — local investors will need to endure.
Smart investors will keep a fair bit of powder dry.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.