The Dow Jones Industrial Average fell over 1,700 points on Wednesday, with loss leaders including Boeing and associated aerospace industrials.
The re-emergence of COVID-19 infections in states where the lockdowns have ended troubled markets. The largest component of the DOW, Boeing, faced increasing trouble as a result of its 737-MAX debacle and dragged suppliers down.
It is evident that the broad market selloff we saw today is the result of buyers who purchased their positions out of speculation and not fundamentals. The stock market is overbought after a 40% bullish retracement. The civil unrest and COVID-19 "sexond wave" are being used to muddle the true reason for market collapse.
The Federal Reserve has been printing trillions of dollars and buying ETFs that contain stocks and bonds. Retail investors have rushed in as institutional investors have sold and companies have issued new shares to raise capital off of the retail horde. In short, the massive presence of cash that the Federal Reserve has printed and the shaky hands of retail longs have turned the stock market into a sickening casino.
COVID-19 will be blamed for the inevitable fall of this house of cards, but it is far more than meets the eye. Psychology has created a FOMO that many will chase to their detriment.
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Picture from Pixabay.
https://www.zerohedge.com/economics/unstoppable-greatest-depression-reverse-wealth-effect