Global stock markets plunged on Friday as investors reacted to signs of a weakening US economy. The S&P 500 fell 2.5%, the Dow Jones fell 2.4% and the Nasdaq sank 3.2%, erasing gains from an all-time high of a few weeks ago.
The selloff was triggered by a jobs report that showed the U.S. unemployment rate rose to a nearly three-year high in July. This led to fears that the Federal Reserve may have to cut interest rates more aggressively than expected to avoid a severe recession.
The main US indices had already fallen the previous day after a series of disappointing economic data. The declines were compounded by sharp declines in stock markets in Europe, Asia and Japan.
Economists now expect the Fed to cut rates by at least 1.25 percentage points by the end of the year, starting with a half-point cut in September. That would make it cheaper for households and businesses to borrow, but the full impact may take months to trickle down.
The dismal economic outlook has affected retirement savings, with 401(k)s heavily invested in equities.
“The Fed is under pressure from all parties right now to get it right and I'm not sure they will,” said Jonathan Rose, managing director of Genesis Gold Group. “Our phones started ringing on Friday as Americans began moving their retirement accounts into physical precious metals.”
The sell-off comes amid concerns that the Fed has waited too long to pivot on monetary policy. Investors are now spooked because the central bank is behind the curve on rate cuts.
In Asia, Japan's Nikkei suffered the second-worst point drop in history, down 5.8%. Other regional markets also fell sharply on concerns about slowing global growth.
The roller-coaster week for markets came despite central banks in Japan, the US and the UK acting largely as expected. But investors are increasingly concerned that high rates could tip economies into recession.
“It's really a no-brainer with the current state of affairs in America that retirees want their life savings backed by precious metals instead of volatile markets,” Rose continued. “Our focus on integrity and transparency is why clients often work with us over other gold companies.”
Genesis Gold Group is a faith-driven precious metals company. Their open and honest approach to transferring or transferring retirement accounts to a Genesis Gold IRA streamlines the process. As a result, mature Americans can defer taxes while seamlessly moving money from their retirement accounts into the “safe haven” of physical precious metals.
This is very important as market volatility increases. The outlook remains highly uncertain, with much at stake in the Fed's next moves. For now, the markets seem poised for further turbulence.
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