Bob Doll’s comments on recent equity market volatility share many of our same viewpoints:
Possible reasons for recent market decline:
- Multi-month decline in earnings
- Widening credit spreads
- Economic weakness from China/devaluation of the Yuan
- Slowing growth and commodity price weakness (deflation fears)
- Fed Policy uncertainty
- Market technicals
- Investor nervousness, skepticism, and uncertainty
Near term thoughts-
- China’s economy is slowing, but not enough to cause a global recession
- US economy continues to perform well
- He doesn’t see this correction as indication of recession, since he see’s no inflation/Fed tightening
Market dynamics- The belief that this swing is likely caused by technical factors and not fundamental weakness in the economy, when combined with the fact that previous declines during this bull market have been buying opportunities, there is belief that this is one as well.
Of course, past performance is no guarantee of future results.