US Stock Markets Fall: US Oil, Nasdaq and Dow Jones Take a Hit

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Wrong Medicine Kills US Dollar | Photo 03

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Nasdaq, Dow Jones and other US stock markets fell on Tuesday, July 7, due to an uncertain outlook for economic recovery. The US Obama administration has suggested another possible round of fiscal stimulus to supplement the private sector economy. Indexes fell across the board: the Dow Jones fell by 1.2%, S&P 500 fell by 1.2%, and Nasdaq fell by 1.4%. 

Inconsistent news about economic recovery has stalled a rally within US stock markets, culminating in worse than foretasted news by June jobs report. Retail sales, the job market, import and export prices and consumer sentiment are some of the reports due later this week, which will guide investor sentiment. New quarter reports are also due, which investors are preparing for. Between 1929 and 1932, the Dow Jones Industrial Average rallied over 20% four times before recovery finally set in.

Global markets have responded adversely to poor economic news. US Oil has fallen from its $71 high earlier this quarter. Lower than expected global and US Oil demand, know to be a driving force of consumption during good times, signals an outlook of stagnant recovery.  

If the economy is truly beginning its recovery things are not look good. GDP has decreased by record breaking amounts. However, manufacturing seems to have slashed inventories as part of a global inventory adjustment. When inventories are finally inline with demand they will start producing products. This production seems to be underway. Honda, who aggressively closed assembly lines from February to May, has begun reopening plants. This increase in manufacturing will jump start the economy, which could not have happened at a better time as confidence stalls.