Market Reactions

Bank of America Issues Economic Warning

Analysts from Bank of America Merrill Lynch recently released a note of warning to their clients indicating that the U.S. market is about to enter a bear market. The forecast extends to both stocks and bonds, and claims that peaks have been hit across different asset classes. With assets across the board at high points, it stands to reason that many are overextended, and once this is detected by the general public, a major pullback will occur. This will lead to large drops in stock prices, pulling indices down across every sector in the U.S. marketplace. Investors especially need to be cautious here, but the warning also extends to traders—even binary options traders. (more…)

Shkreli’s Arrest Rocks Markets

Markets React to Arrest

When someone like Martin Shkreli is arrested, markets reel. That is exactly what happened on Friday, when the Dow Jones Industrial Average fell by more than 360 points, a drop of 2.10 percent. Shkreli has been in the spotlight for the last few months because of the fact that a drug created by a company he is CEO of boosted prices from around $13 per pill to $750.. This was a lifesaving drug, and Shkreli received a ton of public criticism because of this. He’s also been a very vocal presence in social media and this has not helped his public image at all.

In the case of Shkreli, his arrest had nothing to do with his price manipulation, but rather it was related to securities fraud that supposedly occurred at a hedge fund he managed prior to his current post. The most interesting part of this is that much of this fraud happened three or more years ago, and therefore, the damage that was done is long in the past and doesn’t really have any actual bearing on how the Dow–or any other index for that matter–should be performing today. So, as you might have guessed, this is purely a kneejerk reaction to bad news on top of even more bad news. (more…)