Institution Rates Global Stock Market Crash: The Market May Have Overreacted

On August 5, George Boubouras, the research director of K2 Asset Management Company, stated that the market is clearly worried about the recent softening economic data. However, the reaction to last Friday's employment data seems to be overdone as it was just a monthly figure. The rolling data for three months will provide better guidance. The momentum of recent US data has obviously slowed down. Better-than-expected core inflation figures in the US coupled with some comments from the Federal Reserve have led markets to anticipate a 25 basis point rate cut in September. Despite significant market volatility and concerns that weak economic data may continue, overall earnings and credit conditions remain fairly good. Given futures markets expect the Fed will start cutting rates before the U.S election (November 5), this could exacerbate some fluctuations ahead of it.