Despite Sharp Drop Dow Jones Rebounds

Published on: 06 Feb, 2018

Following major sell-offs, U.S stocks are in distress. The Dow Jones average has taken a big hit marking a record high of more 1,500 point drop. Investors have attributed this sharp drop to the recent change in the bond market. Yields on the 10-year U.S. Treasury note dropped from 2.794% on late Monday to 2.758%. The markets rebounded after after the selloff, as the Dow jumped 600 points higher on Tuesday.

The market is still very volatile, as investors cannot pinpoint an exact reason for why the major sell-offs have occurred there is some slight concerns of a correction. Due to the new Tax Laws we have seen higher corporate earnings, but this will force central banks to harden monetary policy to prevent inflation.

"I thought we were going to see the bottom within five minutes of when we opened. I think that's basically what we're seeing," said Ed Keon, portfolio manager at QMA, the quantitative and dynamic asset allocation business of PGIM. "At these levels, stocks represent pretty good value and we're adding to equity exposure." Keon said according to a CNBC report.

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Farris Albokhiti

Email: farris@financialinsiders.com

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