Market Disaster May Not Be Finished, Say Experts

Tuesday marked a turning point in what some are calling a “market meltdown”. The stock markets plunged over the weekend and then started to rebound on Tuesday.

However, many analysts are saying that the disaster is not finished yet. The US Unemployment Report showed a definite increase in unemployment throughout the US, climbing from 4.1% to 4.3% for the month of July. That was more than analysts expected to see, and the fallout caused a massive market decline, both in the stock market and in the cryptocurrency market.

We have seen time and time again that the market tends to course correct after a major selloff. That is the case here as well, as the stock markets climbed a few percentage points each and corrected some of what went wrong over the weekend. However, investors should know that they are not out of the woods yet.

More Bad News Could Still Come for US Stocks

What often happens when there is a price correction is that the market corrects again to take back some of the gains. We also see a correction can occur after a steep decline, but then the correction does not lead to a bull run or even stability for the market.

Analysts are worried that the stock market is still vulnerable to another decline, because the jobs report is still valid and still pointing toward a slowing economy. The selloff occurred because investors were genuinely worried about economic data. A price correction does not erase those fears, and we can expect further downturn in the coming days.

What could be very damaging for the market is if there is more negative news reported close to the last jobs report. That could cause cumulative fear that creates a second crash that is even worse than the first.