Is the Stock Market going to crash?
The most debated question on the stock market now is- Where is what direction is the stock market going to go in the upcoming months. Some are saying it is going to go down 30% and others are saying it’s going to be gradual growth.
We believe that the stock market will not crash again and we also don’t think it’s going to shoot back up. The market will most likely go through a few more small declines but not drop more than 10%. It also should slowly go back up to where we were at the end of last year.
Although the market as a whole shouldn’t crash, some individual stocks may. Many small businesses are going out of business and some big businesses are as well. Their stock price will reflect these loses and will drop fast.
Why we think this,
First of all the stock market doesn’t always represent how our economy is doing because it is always looking forward. Other countries are re-opening and doing fine, meaning we should be able to re-open in the near future. Also we are printing more money and helping out businesses; this helps in two ways: people are still able to buy things and more companies will be able make it out of this recession.
Another good thing is that business is moving more and more online and it shows because some companies are making more money now than they did before COVID19. People are also able to work from and start online businesses, so if COVID19 lasts longer than we think a lot of business will be able to continue making money.
Lastly, the U.S. makes up nearly a quarter of global GDP. “Generally speaking, the US economy is better-positioned to recover from large shocks and potential longer-run shifts than much of the rest of the world. The population is on average younger than much of the rest of the world with more mobility, and labour market restrictions are generally lighter, thereby facilitating greater labour reallocation” said Eric Sims, professor of economics at the University of Notre Dame.
Liberty Brothers 