These 2 Issues Are Pushing Investors Toward Panic. Should They?
Stocks moved sharply lower on Monday morning, as investors woke up to a new week with ongoing concerns about some key issues driving the global economy and the financial markets. As of 11:30 a.m. EDT today, the Dow Jones Industrial Average (DJINDICES: ^DJI) was down 504 points to 34,081. The S&P 500 (SNPINDEX: ^GSPC) had dropped 69 points to 4,364, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) had declined 307 points to 14,735.
Two of the main issues that investors seem to be in a near-panic about are the China Evergrande Group (OTC: EGRNF) real estate development company in China, and the status of the U.S. debt ceiling. It's reasonable to wonder whether market participants are overreacting to the situation, or whether their jitteriness is justified. Below, we'll take a closer look at both issues to see why everyone seems so nervous.
The Chinese economy has grown at a faster pace than the rest of the world for years now, and the country's real estate boom has played a substantial part in driving its economic expansion. Prolific use of debt financing has been a key driver for the Chinese real estate market, helping developers like Evergrande grow at an impressive rate.
Source Fool.com
