Economists are looking to ease fears amid dismal financial news

RALEIGH, NC (WTVD) — After a weak jobs report sent stocks down on Friday, the decline continued into the new week with heavy losses across the board.

At the close, the Dow was down more than 1,000 points, the NASDAQ was down 576 points, and the S.&P finished up 3%.

“This is a classic type of risk situation where people dump their risky assets and buy safe assets, which might be, say, a two-year asset. And when you dump assets are risky, prices go down,” said Cam Harvey, Professor of Finance at the Duke Fuqua School of Business.

So far, the Federal Reserve has resisted pressure to lower interest rates as part of a broader effort to lower inflation.

“It has cost too much for the Fed to wait too long and I’m afraid we will have to pay the price. And let me be very clear that any recession is a wound in disguise. It was unnecessary,” said Harvey. .

Although the inflation rate has fallen significantly from its peak, it is still within the Fed’s target of 2%.

“The Fed needs to lead. Their track record shows they are following,” Harvey said.

Stocks weren’t the only asset that took a hit on Monday, as cryptocurrencies were also heavily affected.

“When there’s market turmoil people get scared or scared, (and) they’ll try to collect money and sell everything in their accounts. By nature, crypto, when it’s risky, you see people are scared and now that’s when the price starts to go down,” explained Eric Meltzer, a portfolio manager at a digital asset investment firm.

As of 5 pm Monday, Bitcoin was down more than 7% on Monday and about 16% over the past five days. Ethereum is down 10% on the day and 25% over the past five days.

“At the end of the week, (investors) see market turmoil overseas, and the first thing they can do is sell what they can sell at that time, which is crypto. Usually, crypto markets over the weekend act as a forecast of what will happen on Monday in US bond markets,” Meltzer explained.

Meltzer, who has worked in the area since 2017, said he often hears from customers during times of extreme uncertainty.

“Often you see in the crypto markets, the rebounds are so sharp. Usually, when FOMO (Feat of missing out) hits, FOMO hits hard. And so it works the other way around,” said Meltzer.

Despite the difficult situation, he encouraged patience.

“If you’re a long-term believer in (cryptocurrency), there’s no reason for you to panic,” Meltzer said.

Crypto currencies are mostly owned by Millennials and Gen Z investors, who often have decades until their retirement dates.

However, for those nearing retirement, savings accounts are a very pressing issue.

“It changes the behavior of people who were thinking about retirement or people who have just retired that they may need to go back to work. It changes their spending. Also, this uncertainty means that you are “I’m making the same choice. spending, and that’s helping to reduce consumer spending and slow growth,” Harvey said.

“I’m drawing my military retirement pension after 30 years of service. I have to keep working. There’s no kicking back. There’s no easy life, I guess. You’re going to have to respect community and work,” said Robert Burton, who lives in the Triangle.

Burton spent several months out of work after his military service before looking for work again. Thank you for the quick change of the easy change.

“Skills atrophy. You have to keep rebuilding, rebuilding, improving, rebuilding and learning new things,” said Burton, who now works for the North Carolina Defense Technology Transition Office.

A survey conducted by T. Rowe Price in March found that about 20% of retirees work full or part time, and another 7% are looking for work. Of those who returned, almost half cited economic reasons for doing so.

“How can we be as self-sustaining as possible no matter what the markets are,” Burton said.

In his previous economic theory, Burton cited the concept of objectivity as an important motivating factor.

“When you come out of the military, you’re part of a community, you’re part of a team, part of a family, mission-driven organizations, especially with Army Special Operations. Where I was, we take those races very seriously. united and once once you miss that,” Burton said.

The cost of living is still on the minds of many Americans, especially retirees, who monitor market conditions and their effects on retirement accounts.

“Nearly two million working North Carolinians have no way to save for retirement,” said Chris Brandenburg, Director of State Advocacy and Federal Issues for AARP North Carolina.

The organization supports North Carolina Work and Save, a program that would allow those working for employers who do not offer retirement plans to deposit money into a state-managed account. A bipartisan House bill was introduced last year but did not move forward, although Brandenburg hopes it will move forward in 2025.

“We’ve seen 20 states that have gone ahead and passed this model across the country,” Brandenburg said.

In the past, Brandenburg has described Social Security, an important source of income for retirees, as its “bread and butter issue.”

“We know that long-term solvency is a real problem for Social Security. We know in a decade that it’s expected to be an issue. Unfortunately, Congress is not known for being proactive. . But it’s still something we’re working on day and night to ask them to take drastic measures,” Brandenburg said.

According to an April 2024 AARP survey of seniors saving for retirement, 20% of adults age 50 and older have no retirement savings, and 61% are worried they won’t. enough money to support them when they retire.

Even after the last trading day, Dow (2.62%), NASDAQ (9.71%), and S.&P 500 (9.35%) total per annum. Additionally, Bitcoin (23.45%) and Ethereum (3.47%) have also gained in value year to date.

“Try to look at the long-term view when it comes to the market. It is very easy to focus too much and take a screenshot of the here and now. But we know S.The &P 500 over the past 50 years has grown at a 10% rate of return,” Brandenburg said.