CHICOPEE, Mass. (WWLP) – A rocky start to 2016 on Wall Street. The stock market took a hit to start the year, leaving many wondering what this means for their investments.
The Dow Jones Industrial Average closed down 276 points Monday. At one point, it was on track to be the worst opening day in 84 years, down 476 points before close. Although, the market managed to recover slightly. That’s one reason Raymond James financial advisor Mark Teed told 22News he’s hopeful the market will continue to improve.
“These events happen all the time. Don’t let something like this ruin your long-term investment plans. You might sell off tomorrow based on what you hear tonight, and then tomorrow you could be sitting in cash for the rest of the year,” Teed said.
Slowing growth in China and escalating tensions in the middle east contributed to Monday’s major sell off. In China, new data on Chinese manufacturing sent a wave of financial concern across the Pacific. China’s main index shed 6.9% of its value, forcing an emergency trading halt.
Chinese authorities have been trying for months to restore confidence in the country’s stocks after a plunge in June rattled global markets and prompted a panicked, multibillion-dollar government intervention.
In the Middle East, tensions are rising, which also contributed to Monday’s selloff. After Saudi Arabia ended its diplomatic relations with Iran, Sudan and Bahrain followed suit. This lead to fear concerning the global oil supply and prices. Initially, crude oil prices rose 1.5% before the stock market erased the gains.
The damaged relations come after Saudi Arabia executed a prominent Shiite leader. That sparked violent protests against Saudis in Iran. Iran’s supreme leader warned Saudi Arabia would face “divine revenge” for the crime.
Teed said time will tell, but as of now, he expects oil prices to remain low for the coming weeks, and the stock market to recover.