Economists look to ease fears after gloomy financial news

Raleigh, NC (WTVD) — After a weak jobs report sent stocks tumbling on Friday, the downward momentum continued into a new week Huge losses throughout.

By the closing bell, the Dow fell more than 1,000 points, the NASDAQ shed 576 points, and the S&P ended 3% lower.

„It’s a classic risk-off situation where people dump their riskier assets and buy safer assets, which could be two-year Treasuries. If you dump risky assets, prices go down.” said Cam Harvey, professor of finance at the Duke Fuqua School of Business.

So far, the Federal Reserve has resisted pressure to cut interest rates as part of a broader effort to reduce inflation.

„It’s very expensive for the Fed to wait this long, and I’m afraid we’re going to pay the price. And let me be clear that any recession is self-inflicted. It’s unnecessary,” Harvey said. .

Although the inflation rate has come down significantly from its peak, it remains close to the central bank’s target of 2%.

„The central bank should lead. Their track record suggests they will follow,” Harvey said.

Stocks weren’t the only asset hit hard on Monday, as cryptocurrencies also took a hit.

„When there’s market volatility, people get scared or scared, (and) they try to raise money and trade all the stuff in their accounts. Naturally, crypto, as risky as it is, you see people panic, and that’s when the price starts to fall,” said the digital asset. Eric Meltzer, associate portfolio manager at the investment firm, explained.

As of 5 p.m. Monday, Bitcoin was down more than 7% on Monday and about 16% over the past five days. Ethereum is down 10% in one day and 25% in the last five days.

„At the end of the weekend, (investors) look at the market volatility overseas, and the first thing they can do is trade these commodities that they can actually trade at that time, which is crypto. Generally, crypto markets are active over the weekend. The forecast for what will happen on Monday in the U.S. stock markets ” explained Meltzer.

Meltzer, who has worked in the space since 2017, said he often hears from clients during times of extreme volatility.

„You usually see in crypto markets, the rebounds are sharp. Usually, when FOMO (fear of missing out) hits, FOMO hits hard. So it works both ways,” Meltzer said.

Despite the rocky stretch, he stressed patience.

„If you’re a long-term believer in (cryptocurrency), you have no reason to panic,” Meltzer said.

Cryptocurrencies are mostly owned by millennials and Gen Z investors, who typically have decades until their target retirement date.

However, for those approaching retirement, savings accounts are more important.

„It changes the behavior of people who are thinking about retirement, or people who have recently retired may need to go back into the workforce. It changes their spending. And this uncertainty means you’re not going to create the same discretionary spending, and that feeds into slower consumer spending and slower growth,” Harvey said.

„After 30 years of service I’m getting a retirement pension from the military. I have to keep working. Can’t kick back. No easy life, anymore I believe. You have to give back to the community and the work. ,” Triangle resident Robert Burton said.

After his military career, Burton took a two-month layoff from the workforce before seeking employment again. He appreciates the quick turnaround behind the easy change.

„Capability decays. You have to constantly rebuild, retool, improve, reskill and learn new things,” said Burton, who now works at the North Carolina Defense Technology Transition Office.

A study published D. Rowe Price In March, 20% of retirees were working full-time or part-time, and 7% were looking for work. Of those who returned, nearly half cited economic reasons for doing so.

„How can we be self-sufficient no matter what the markets are,” Burton said.

In past economic considerations, Burton cited a sense of purpose as a key motivating factor.

„When you come out of the military, you’re part of a community, you’re part of a team, you’re part of a family, mission-driven organizations, especially in military special operations. Where I’ve been, we consider that tribe very much. Tight-knit. , and immediately you lose it,” Burton said.

The cost of living is a concern for many Americans, especially retirees, who closely monitor market conditions and their effects on retirement accounts.

„Nearly two million working North Carolinians have no access to retirement,” said Chris Brandenburg, AARP North Carolina’s state and federal issues advocacy manager.

System supports North Carolina Work and SaveA plan that allows people who work for employers that don’t offer pension plans to put money into a government-administered account. A bipartisan House bill was introduced last year but did not advance, and Brandenburg is hopeful it will advance in 2025.

„We’ve seen 20 states that have already moved forward with sending some version of this across the country,” Brandenburg said.

In the past, Brandenburg has described Social Security, a major source of income for retirees, as its „bread and butter issue.”

„We know the long-term solution is a real problem for Social Security. We know it’s going to be an issue within a decade. Unfortunately, Congress has not been known to act. But it’s still something we’re working hard on. I’m asking them to take some proactive steps day and night,” Brandenburg said.

A step April 2024 AARP survey Among adults saving for retirement, 20% of adults age 50 and older have no retirement savings, and 61% worry about not having enough money for retirement.

After a rough trading day, the Dow (2.62%), Nasdaq (9.71%) and SThe &P 500 (9.35%) is all up for the year. Also, Bitcoin (23.45%) and Ethereum (3.47%) have also gained year-to-date.

„Try to take a long-term view when it comes to the market. It’s very easy to focus too much and take a screenshot of the here and now. But for us SThe &P 500 has averaged a 10% return over the past 50 years,” Brandenburg said.