In a nut shell this is a normal correction in a big booming bull market. Statistically, on average the market has around three 5% corrections in a year. Therefore this is normal market volatility. The fundamentals of the economy & the market have not changed:
Earnings expectations for the third quarter are looking stellar again, with expected growth in profits to be over 19%, after more than 20 percent in the first two quarters of the year.
The unemployment rate has now fallen to a 49-year low of 3.7% in September, indicting the US consumer remains strong
3. Stock Buyback Boom!
U.S. public companies have announced $835 billion in stock buybacks so far this year, already more than the previous annual record of $810 billion in 2007
4. American Business is Strong!
Last week we saw a larger-than-expected 230,000 September jump in private payrolls tracked by ADP and the Institute for Supply Management’s non-manufacturing index hit the highest numbers since 2011, indicating business conditions continue to be positive
Unfortunately these corrections don’t last that long, therefore investors with cash on the sidelines need to take advantage of this short term dip in prices before it is too late. When the US markets sold off earlier this year, it then went onto to hit new highs.