Monday’s stock-market fall may be a sign of more serious trouble ahead

NY Post

The Dow dropped 614 points yesterday, its worst day since October 2020 — and most analysts blamed worries about Chinese real estate. That would seem an odd thing to be causing such fear and loathing in the US stock market, but don’t discount it — such seemingly unrelated spasms are often the spark of something far worse. What appears trivial often forces market players to focus on all that’s wrong with the economy, corporate earnings, fiscal and monetary policy — the main drivers of stocks. History shows corrections often start with a random headline or event that’s a catalyst for something bigger. And there is enough wrong in the US economy that people are looking at the half-empty part of the glass. I don’t know if Monday’s correction will make meme stocks trade like the the penny stocks they were or force some rational valuation of Tesla (the electronic-car maker has just become profitable, yet it has a bigger market cap than the Big 3 combined). But a quick look back at some past corrections followed the same scary pattern. Take early 2000, during the Internet-stock craze, when a few big tech bulls in the Wall Street analyst community casually worried about some dotcoms being “overvalued.”

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