Today was the second big drop in the U. S. stock market. Following Friday’s drop and a continuation when the Chinese market opened this morning.
Now we’ve seen big drops before. We’ve seen corrections before. And the stock market has been in a bull market for several years now.
So what does it all mean?
Overall this is a reflection of overall unrest in the world.
You have China devaluing its currency and creating unnaturally created bubbles – just like the U. S. housing bubble, past stock bubbles, and coming education bubble (i.e. student loans that bury people in debt).
You also have the E. U.’s faltering economic situation led by Greece.
And you have civil unrest – terror groups taking over countries, mass immigration, and a U. S. political season that fans the flames.
So how does his apply to your business?
Do you own a business that does business with China? If so you could be in a precarious situation.
Do you have funds tied up in the stock market? Expect some bumpy rides.
You’re a consumer – depending on the direction in the U. S. election for President, you could see tariff plays that lowers your purchasing power.
So those are the big things I see that will affect everyone to some extent financially.
But what other business aspects are at work here?
The biggest thing at work here is the power of expectations. The facts of the situation here are well known. What isn’t well known is what the impact of those facts will be. But given the long bull market run-up in prices, and the concern about a collapse of the China economy and its impact on the world given that it is a third of the world economy, the feeling is a correction is due and that is playing out on the world stage right now.
What happens next is anyone’s guess.
What can you learn from this? Make sure you understand the difference between the facts and the fears. And recognize trends in the making. Being aware and ready to provide solutions to those fears and evolving trends will help your business leapfrog the competition. Are you ready?
