What the Heck is Going on the Markets?

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What the Heck is Going on the Markets? Posted: 05 Aug 2011 08:28 AM PDT Over the last few days we have seen a great amount of market volatility. FOX Business Network reporter Robert Gray has been closely monitoring the debt ceiling debates that have been enveloping the United States, but more importantly how they impact things like the markets and jobs. Gray took time to weigh in on the massive plunge the Dow took yesterday and how the debt deal comes into play: photo credit: doug88888 The US Treasury's debt default deadline grabbed the headlines but even though we averted that crisis, the USA may still lose its pristine AAA credit rating depending on what kind of plan Congress creates for cutting our national debt.  Plus savvy investors and a handful of economists have been highlighting growing weakness in the economy for several weeks.  Over the past week we've gotten lackluster reports on GDP growth, manufacturing and service sector expansion, anemic income growth and consumers saving more (bad for a consumer-based economy like ours) and stubbornly high unemployment.  That has reinforced the view that the economy is slowing, if not possibly dipping back into recession.  Traders also say some of Thursday's selling was positioning for a disappointing jobs report from the Labor Department Friday. By and large, strategists said the debt default was no reason for most individuals to sell.  But if the economy slows further and we head into recession, it may be time for some folks to take chips off the table.  It appears that many already are, which is what some of the best advisors I speak with have been advocating for weeks if not months.  Some of them see the cascade continuing, erasing the past two years worth of gains. Huge selloffs can create opportunities and money managers have told FOX Business they are buying select companies, though most will wait until the dust settles a bit.  Some companies or other investments may post gains even during a slowdown or recession. People should always worry about their investments.  Most financial advisors tell me that pain tolerance and time horizon are the two things to consider when making any investment. Individuals got a wakeup call on both in 2008 and early '09, and judging by mutual fund flows of the past few years, many investors never returned to stocks.

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