The Real Reason Stocks are Sinking

It’s the job of market media to seek out and inform investors of the factors driving market moves, but they are not always correct in their quick-draw determinations. After all, the people mostly making these determinations are television producers and newspaper and website editors. Sure they try to take their lead from market strategists and influential investors and traders, but oftentimes the surveyed individuals simply talk their book or are otherwise wrong. Business television was telling us last Thursday that the driver of the tanking stock market was interest rate fear on Fed member speak and an obscure legislative action out of Russia that could threaten global stability supposedly. Both those ideas are reaches; I think that much should be clear, as we just had a very clear communication from the FOMC. The real driver of the stock market tanking last week was two-fold in my view, and includes an underlying capital flow driver and a catalyst spooking capital today. To put it simply for those of you who need to know right now, the fiscal year-end of hedge funds and other institutional investors have them on the ready to lock in their yearly gains that are at risk now. Today’s specific news event likely acting as spooking catalyst came from the Iraqi Prime Minister, who said in New York that there is a credible terror threat against U.S. and French subway systems. See the full report, The Real Reason Stocks Tanked here.