After the first rate cut this year, stocks shot up. Why did it drop so much this time? Why arent investors happy about the rate cut and want to invest more?
2007-12-11 17:17:25 · 4 answers · asked by benj 2 in Business & Finance ➔ Investing
A week or so ago, the fed made comments that made it appear they would deal aggressively with the current credit problems at the next (yesterdays) meeting. That's when the market started shooting up 100-200 points a day. So when the news came out that it was a quarter point, rather than the hoped for half point, the market had already factored that in, and dropped in disappointment that the cut wasn't greater. The market often rises in anticipation then drops on the news itself.
2007-12-12 04:44:53 · answer #1 · answered by llazyiest 5 · 0⤊ 0⤋
We expected a half. The quarter was already priced in markets were up the few days before but we were hoping for more. These cuts are hurting the dollar so some don't want cuts at all but the people who do want big cuts.
2007-12-12 01:21:48 · answer #2 · answered by shipwreck 7 · 1⤊ 0⤋
Investors are very much like spoiled little brats, if they don't get what they expect they pout and shout; and whine like babies. These are the inexperienced traders/investors.
2007-12-12 08:33:39 · answer #3 · answered by Barney 6 · 0⤊ 0⤋
Short answer is it wasn't enough. I'm glad it wasn't, it's a lesson to teach people who count eggs before hatching.
2007-12-12 06:10:17 · answer #4 · answered by Smartass 4 · 0⤊ 0⤋