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Written by Value Seeker
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Friday, 04 January 2008 |
The market was crushed during the first trading week of 2008. The S&P 500 ended the week down 3.85% YTD. The Nasdaq saw even worse returns, down 5.57%
Stocks were down primarily due to recession fears. A worse-than-expected jobs report released Friday sparked a massive selloff.
Many are now hoping the Fed will cut rates quickly. Futures markets predict there is about a 75% chance of a 50 point basis rate cut when the Fed meets again. However, many fear that it is already too late for the Fed to prevent a recession and that it needed to have acted quicker in cutting interest rates. Many have believed that Fed has taken a too academic approach towards policy instead of focusing on what is going on in the "real world."
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