Racket wrote:
Maserati (or anyone), are you concerned that European bear market troubles will spill over top the US? It's getting rough over there and ECB is going to start unwinding their balance sheet.
I think it can't help but affect US markets. Normally i might think that small caps would enjoy a little shelter from the trade impact, but as Igy is quick to point out, they carry a lot of debt in general so that's squeezing them in this downturn.
If you ask me, there's two things and possibly a third that may help the US market in the short term. First, we're already seeing a softening of the language used to forecast what was a foregone conclusion up to a couple of weeks ago - the future rate hikes. Second, rumors have it that the US consumers are spending at record levels in Q4, and after weeks of bad news, this is going to shine like a star on top of the national Xmas tree. And third, like you said yourself, don't underestimate the political incentive to rescue the markets and play the hero. China can't screw around much longer and i'm sure they know that, too.