Market Volatility – what just happened?
As you may have noticed, the last week of July and the first week of August were quite turbulent for global stock markets. The main drivers of this volatility were:
The US Federal Reserve's decision to keep interest rates steady, but signaling a possible rate cut in September due to slowing economic growth and inflation.
Weak US labour market data, which showed lower than expected job creation and a rise in unemployment.
A sell-off in tech stocks, partly due to mixed earnings results and high valuations.
A strengthening Japanese yen, which put pressure on Japanese exporters and investors who borrowed in yen to buy other assets.
Increased geopolitical tensions, especially between the US and China over trade and currency issues.
These factors combined to trigger a sharp drop in stock prices and a rally in bond prices, as investors sought safety and lower risk. The Australian market also followed the global trend and suffered its worst one day fall since 2020.
So what does this mean for you and your investments?
Get expert insights from Patricia Garcia, Director and Financial Adviser at Your Vision Financial Solutions. Watch the latest vlog below.
* This information is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice and consider the Product Disclosure Statement.