[New York – Kobayashi Yasuhiro] On the 18th, on the New York stock market, concerns grew that high US interest rates would put pressure on the economy, and the closing price of the Dow Jones Industrial Average (30 stocks) fell by $1,123.03 from the previous day to $42,326.87, marking the 10th consecutive trading day of declines. According to U.S. media, this is the first time in about 50 years since 1974 that the market has fallen for 10 consecutive trading days. This marks the first time in about four months since early August that the Dow Jones Industrial Average has fallen by more than 1,000 dollars. In its interest rate outlook released on the 18th, the Federal Reserve Board (FRB) reduced the number of interest rate cuts it expects to make next year to two, down from four. A wide range of stocks, including financial giant Goldman Sachs and online retailer Amazon.com, fell in price amid concerns that rising long-term U.S. interest rates would weigh on corporate earnings. This is the first time the Dow Jones Industrial Average has closed below 43,000 in about a month and a half since the U.S. presidential election on November 5. Since November 6th, when it was reported that Trump was certain to win the election as the next president, the Dow Jones Industrial Average has continued to rise due to expectations for Trump’s policies, and on the 4th of this month it reached the 45,000 dollar mark for the first time in history. Since then, the situation has completely reversed, and investors are beginning to become aware of negative factors such as concerns about a resurgence of inflation (rising prices) due to Trump’s proposed tax cuts and fiscal stimulus, as well as trade disruption due to higher tariffs. The Nasdaq Composite Index, which has many IT company stocks, closed down 716.37 points at 19,392.69. Stocks such as electric vehicle maker Tesla were sold. Yomiuri Shimbun Online 2024/12/19 06:11.
Prices are high right now because America and Europe have given too many subsidies to deal with the coronavirus pandemic, leading to abnormal inflation that is now spreading to Japan. Inflation cannot be stopped by Japan alone because it is caused by factors outside of Japan. As a major importing country, prices in Japan will be dragged down by import prices and will eventually converge to a single point (similar to prices in Europe and the US), but the only way to get there is to approach it from above or from below. Japan has been in a state of deflation, which has kept price increases more subdued than in Europe and the US, but the overall rate of price increase has not yet reached those of Europe and the US. The reason why the yen is weak now is because America is raising interest rates to stave off inflation in the country, and the dollar is being bought in response to the higher interest rates. If inflation in the United States subsides, the United States will also begin to lower interest rates, and the weak yen will be resolved. If deflationary Japan were to raise interest rates, it would suffer the double whammy of a recession caused by slowing consumption and rising prices. >>1.
I have been investing daily in SP500 and Orkan for the past 10 years. We’ve experienced the ups and downs of the coronavirus pandemic, so bring it on! Just keep accumulating a certain amount every day.
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