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Stock Market Update for September 17th, 2007

By Erik Folgate

The the Dow Jones has dipped about 70 points in the first half of the day. The Nasdaq index has fallen 25 ponits. Traders are weary about the upcoming Fed meeting where experts are predicting that they will raise the interest rate. Tuesday, the Fed will meet to discuss making adjustments to the federal fund rate. Many experts are expecting a quarter point increase. The decrease in jobs and the slumping retail sales market has caused some to believe that the Fed will make the adjustment and that we are approaching a recession.

A quote from the Yahoo Finance Article.

“A quarter-point is going to be disappointing. It’s already priced in,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. But the Fed probably won’t want to lower rates by more than that, he said. “The big issue is gold and oil have been spiking higher, which people could argue is inflationary, but economic data has been weak. The Fed’s in a tough place.”

And it’s possible the Fed might not go through with a rate cut at all if it believes the economy is still growing moderately and that inflation remains a threat; if the central bank stands pat, stocks are likely to plummet.

Also, Alan Greenspan spoke about the economy and he was quoted, stating that he believes the economy is NOT headed towards a recession. I agree with Greenspan. You can say, “I told you so” if this economy slumps, but I don’t think there are enough indications to show that our economy is headed into a recession. For the average joe, you should not be worried about your investments or job opportunities at this point.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • http://www.growyourfunds.com Aaron

    Greenspan is all over the news today regarding his comments about the war and the treasury markets. His predictions about the economy are quite drastic and it seems ironic considering his past statements. I wrote about this in my blog:

    http://www.growyourfunds.com/2007/09/alan_greenspans_new_book_arriv.html

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