US stocks fall; S&P 500 ends with 2nd straight weekly loss

submitted by nygal from marshallindependent.com

sorted by:
top
newinsightfulfun
you are viewing a single comment's thread.

view the rest of the comments →

[–]XOXO_HandBanana_XOXO 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

I don't think it's so much a bubble pooping, as it is Coronavirus creating an Externality. Cornoavirus is really screwing up China's market, which is largely a supply market. So, since China can't deliver all the goods it was paid for, other markets are having to deal with a shortage. Various industries, from tech to auto can expect slowdowns in production due to a lack of parts being imported. That's the main cause of the economic instability.

[–]magnora7 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

I agree. But what you said, and a bubble popping, aren't mutually exclusive. The bubble is in the financial sector, what you're talking about is the manufacturing sector. If manufacturing gets slowed down as you mentioned, then I believe it will impact the financial sector deeply, because it's based on the manufacturing sector. Then once the financial system has negative momentum, it can create a runaway effect, and the current US stock market is extremely overpriced. This is what could trigger the financial bubble pop, the secondary financial sector effects of the manufacturing slowdown