Goldilocks Gets Cranky, and the Markets Slide

Dow futures down about 500 points before trading
By John Johnson,  Newser Staff
Posted Jul 8, 2021 7:56 AM CDT
This Might Be an Ugly Day for the Stock Market
People walk through steam from a street grating outside the New York Stock Exchange in this file photo.   (AP Photo/Richard Drew)

If you periodically check on your 401k, this might be a day to skip:

  • The drops: The markets were on track to have a particularly lousy day for a slew of reasons, just one day after reaching record territory. Dow futures were down nearly 500 points in the hour before US trading opened, or about 1.4%, while S&P 500 and Nasdaq futures were down by similar percentages, reports CNBC.
  • Why? A variety of factors appeared to be at play. The fast-spreading Delta variant of COVID and its potential effect on the global recovery is one, with news that Japan might bar spectators from the Olympics not helping the mood. The AP notes that newly released minutes from the latest Federal Reserve meeting, in which members talked about reducing the economic stimulus, is another factor.

  • Goldilocks analogy: “The market has been in one of those ‘Goldilocks’ stretches when economic growth was accelerating while inflation and interest rates remained low," Timothy Lesko of Granite Investment Advisors tells CNBC. “A few weeks ago the porridge was too hot, now it seems it is too cold. With markets at all time highs and some valuations stretched there is little room for economic slowdown in this market.”
  • Her again: “There is a bit of a recognition that things aren’t looking as economically positive as they were in mid-June when everything seemed to be hitting that Goldilocks middle ground,” Edward Park of Brooks Macdonald tells the Wall Street Journal. “Delta, or the next delta, will be a recurring risk in markets."
(Read more stock market stories.)

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