Do you think we are entering a severe recession now, after the stock market plunging today?

Question

Do you think the world's markets will recover quickly after today?

How will this carry over to consumer spending you think?

Answer 1

Of course we are entering a recession. Business is slower than ever in many industries.
High Street shops have permanent sales, Long term outlets are giving up leases because costs have risen so much.
The government is keeping quiet on this, but just look around your local area.
The recession started a while ago!

Answer 2

The fall in the stock market today was directly attributed to the Chinese market.

China is a huge market which has a lot of large institutional investors from all over the world. Basically what has happened is that the growth in the chinese market has been very high and is threatening the stability of China.

The Chinese government have mentioned that they may try to restrict the amount of investment to try and reduce the growth. It is this uncertainty that has led to the fall in the stock markets - as institutional investors sell there stocks rather than buy stocks.

Movements like today are not unusual in the markets, if you look at the movements in the FTSE 100 over the last year you will see significant growths combined with large falls.

One days movement in the stock exchange is not a good guide of economic movements. The worlds markets are likey to recover to some extent over the next few weeks. Indeed the fall in the index this afternoon was half as much as the fall in the morning i.e. the index had fallen by about 100 points by lunch but only by another 40 or so by the end of the day.

This market would not be expected to have any effect on consumer spending.

Answer 3

No, there is no recession in the near future. Possibly in 2008, but not in 2007. The market has seen record M&A activity for companies, unemployment rates are good and consumer confidence is at a 5 and a half year high.

There is on average eight market corrections per year. Plus, this has been the longest market rally without a correction on record. Quite simply, we have been due for a correction.

The global markets will also correct and continue to do well.

The correction will last a week if not two and then will rally along with the rest of the world markets.

There will be little affect on consumer spending as long as gas prices remain low. When gas prices rise in the summer, you may see consumer spending taper off and the Fed may lower interest rates to spur the economy.

Answer 4

It is funny how it works.

When stock falls on big ticket items, China, Cheney, etc.
people take the profit and dump the stock.
Who want's to buy a stock that is falling in value?
That has an effect on all items. It is like a trickle down effect.

Well, if people keep selling stock, it causes the market to collapse. That is what is happening.
There are triggers put in place where you aren't allowed to sell your stock, or trading is halted.
This keeps the market from totally collapsing.
Some people can get passed these loop holes.
That is what you are seeing.
Everybody is rushing to sell their stock.

Some investors consider this a buying market and they are trying to buy low priced stocks.

It is funny how they keep saying to stay in for the long run and leave your stock alone.

Tomorrow is going to be worse.
People are going to keep dumping their stock and taking their losses.

It is not too smart to leave money in a stocking that keeps falling.
A lot of people have to do that.
Those that do leave there money in will take a big loss, but that is the breaks. Easy come. Easy go.

Wait until it hits bottom, then buy.

Answer 5

Greenspan reckons there will be a recession in the US later this year, and this could be the start of it. Or not. Some consumers will carry on spending regardless. I think there will be a rally towards the end of the week, but what do I know ?

If not - investment opportunity !

Answer 6

It's just one day. There are ups and downs all the time. Some are bigger than others. If it worries you, get out of the market. Get something that lets you sleep at night.

As for my self...I am scrounging my couch for lost money to get more in the market.

Answer 7

1 day means nothing. No 1 can tell anything from this. Consumer spending will not be impacted unless drags on & even then the housing bubble much more critical on that.

Answer 8

We are not entering a recession any time soon. That doesn't mean that equity markets cannot continue to fall, though.

Answer 9

What plunge?
It hasn't fallen enough to comment on here, but the media hyped it into Armageddon.