The stock markets in the United States and Europe declined after the International Monetary Fund (IMF) reduced its 2015 global growth outlook to 3.8% from 4%. The international organization said the global economic growth this year remained unchanged at 3.3%.
The IMF emphasized that the global economic recovery remains uneven and fragile citing the persistent weakness in the euro are and the slowdown in the economies of several countries in the emerging markets.
In a telephone interview with Bloomberg, Dan Curtin, a global investment specialist at JP Morgan Private bank said, “A combination of not-perfect economic data and some geopolitical risk has put doubt in some investors’ minds and that brings some volatility.”
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According to Curtin, the root of the recent market pullback was caused by the combination of the strong dollar, protests in Hong Kong, Ebola scare and weakening oil prices.
The S&P 500 dropped 3.1% from its record-level of 2011.36 points on September 18. However, a recent report from Fact Set showed that industry analysts and market strategist estimated that the index will continue to rise.
The IMF warned that a sustained period of low-interest rates (near zero) policy in advanced economies increased the risk in some financial markets. The Federal Reserve previously stated that the equities of several biotechnology and small-cap companies were stretched. Since then, the Russell 2000 slid 6% while the NASDAQ Biotechnology index climbed 6.6%.
Separately, billionaire investor, Warren Buffett said the stocks are currently “in a zone of reasonableness” during the Fortune’s Most Powerful Women Conference.
- Dow Jones Industrial Average (DJIA)- 16,715.79 (-1.63%)
- S&P 500- 1,934.87 (-1.52%)
- NASDAQ- 4,385.20 (-1.56%)
- Russell 2000- 1,079.38 (-1.39%)
- EURO STOXX 50 Price EUR- 3,082.10 (+1.80%)
- FTSE 100 Index- 6,495.58 (-0.55%)
- Deutsche Borse AG German Stock Index DAX- 9,086.21 (-1.34%)
- Nikkei 225- 15,783.83 (-0.67%)
- Hong Kong Hang Seng Index- 23,422.52 (+0.46%)
- Shanghai Shenzhen CSI 300 Index- 2,450.99 (+0.13%)
Stocks in Focus
The stock price of AGCO Corporation (NYSE:AGCO) declined more than 10% after the company reduced its 2014 earnings guidance. The company now expected its full-year yearnings in the range of $4.10 to $4.30 per share.
GT Advanced Technologies Inc (NASDAQ:GTAT) rebounded as much as 133% today. Yesterday, the company plummeted 93% percent after filing for bankruptcy protection.
The shares of Keurig Green Mountain Inc (NASDAQ:GMCR) gained more than 4% to $139.69 per share after Goldman Sachs Group Inc (NYSE:GS) initiated a coverage with a Buy recommendation.