Tags: Trump Administration | larry kudlow | stock | market | fall

Kudlow Plays Down Stock Market Drop

(AP)

Sunday, 14 October 2018 10:15 AM

White House economic adviser Larry Kudlow on Sunday played down the U.S. stock market drop as a normal correction.

"I think the background is very positive for the stock market and I think, as I said, corrections come and go and people should ... stay very calm over these things, they are quite normal," Kudlow told the "Fox News Sunday with Chris Wallace" program.

The Dow Jones Industrial Average dropped more than 800 points on Wednesday, which was fueled in part by worries over higher interest rates.

"These kind of corrections are absolutely normal. The economy is in terrific shape. We are in an economic boom," Kudlow said.

Kudlow also said President Donald Trump had some concern the Federal Reserve may be raising interest rates too fast but respected its independence.

The Fed has raised interest rates three times this year as it seeks to prevent a vibrant economy from overheating.

The U.S. benchmark S&P 500 stock index snapped a six-day losing streak on Friday as technology stocks recovered after a week of losses, with investors looking for bargains ahead of the third quarter earnings reporting season.

The S&P technology index gained 3.2 percent on the day, showing its strongest one-day gain since March 26, although it still registered its biggest weekly drop since March 23.

“People are starting to buy in, thinking the higher flying growth stocks were oversold. They wanted to get in before next week when earnings start coming,” said Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

But until the U.S. and China reach a trade deal, the rebound in the stockmarket could be vulnerable as investors are anxious about the impact of tariffs on corporate profits.

“If earnings come out good I think this rally is sustainable if we don’t get negative trade news. Trade news is the wild card. That’s the big if,” said Sampson.

Meanwhile, Kudlow added that Trump and Chinese President Xi Jinping will likely meet at Argentina's G-20 summit in November.

© 2019 Thomson/Reuters. All rights reserved.

   
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White House economic adviser Larry Kudlow on Sunday played down the U.S. stock market drop as a normal correction.
larry kudlow, stock, market, fall
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2018-15-14
Sunday, 14 October 2018 10:15 AM
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