James Hughes, Chief Market Commentator for eToro, joined Nick Batsford, CEO of Tip TV, and Zak Mir, technical analyst for ShareProphets.com, on the Tip TV Finance show to discuss the recent stock crash.
Does the market tend to crash at the end of a two-term presidency?
Batsford highlighted the question over the potential emerging markets stock crash in 2015, as well as the previous crashes in recent years. Mir added that the market tends to crash at the end of a two-term presidency - Clinton, Bush, Nixon, all of them had worked.
$1 trillion wiped off US market yesterday
Batsford noted Nicole Elliott who outlined the $1 trillion which was wiped out of the US markets yesterday, and also commented how US student loans and credit card debts amount $1 trillion a piece. The outlook for stocks remains positive, despite volatility, added Batsford. The conditions are not for a US recession, but perhaps a stock crash.
USD beaten yesterday in thin market conditions
The EURUSD rallied to 177.70 in a matter of minutes whilst the USDJPY slumped to 116.25 from 122.00 earlier in the day, outlined Batsford. Hughes commented that the Yen had held up some big downside support, and that it seems to be a safe haven like back in 2008.
Risk of US recession extremely low
Batsford noted Goldman Sachs (NYSE:GS), which believes hat the risk of a US recession is low. Yet he continued that the selloff was a contribution of factors including the China slowdown, the fall in oil prices to multi-year lows and the worries of a potential Fed interest rate hike approaching in September. These factors are unlikely to derail the long term global expansion, he commented. On the note of rate hikes, the impending Fed hike is unlikely to occur due to global events.