The Dow is in the middle of a 1,200-point slide over the last week, which has investors wondering if this is the start of the next stock market crash.
To help Money Morning readers make sense of the recent decline, we want to show you exactly what’s driving the Dow Jones Industrial Average‘s fall and what it means for your money.
Today, we’ll examine two of the key factors responsible for the Dow’s fall and if it signals the start of a larger downturn.
We’ll also show you a way to protect your investments if this week’s decline turns into a full-blown stock market crash…
Volatile Trade Relations and Interest Rate Hikes are Sending Markets into Free Fall
As tech stocks fall in the face of mounting downward pressure, many investors are concerned that this week’s drop in the Dow Jones Industrial Average is on the beginning of a coming stock market crash.
There are two key factors that could turn these fears into an unpleasant reality.
The first is continued escalation in the trade war between the United States and China.
The latest trade war valley is weighing on stocks this week. Last Sunday (Oct. 7), Beijing announced that it intends to cut China’s reserve requirement ratio by 100 bias points.
This means that Chinese banks will have to keep far less cash in reserve than they have traditionally.
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Experts argue that this surprise move by China is intended devalue the nation’s currency.
On the whole, they’re right – the ratio cut is expect to dump $750 billion yuan into China’s economy. That’s roughly $109.2 billion American dollars.
With more money flowing through the