When it comes to YOUR MONEY, we take it a step further. That's why Mark Grywacheski from the Quad Cities Investment Group appears on Good Morning Quad Cities every Monday to give us his analysis of the latest business, economic, and financial news.
The rollercoaster ride continues for investors as the Dow Jones Industrial Average lost more than 2% of its value the week of September 5th, 2021. On Friday, September 10th, 2021, it fell by 271 points for its 5th consecutive day of losses.
So why is this happened? Our Financial Expert, Mark Grywacheski with the Quad Cities Investment Group, says some of the big Wall Street institutions are downgrading their outlook for the remainder of 2021. Unfortunately, that's not all:
"Then, the Federal Reserve’s branch in Atlanta piled onto that sentiment," he added. "But we’re not talking about a minor downgrade to the economy. These estimates for economic growth in the 3rd quarter are being reduced by as much as 40%."
Grywacheski says the reason for this concern and reevaluation of the strength of the U.S. economic recovery comes from a number of red flags:
- Inflation is now at a 30-year high.
- The labor market has been underperforming over the past 5 months.
- There's a pullback in retail sales and consumer spending.
- The rise of the Delta variant of COVID-19
"As we came out of the height of the pandemic back in March/April of 2020, we quickly saw this very sharp V-shaped recovery in the economy," he explains. "And as the economy continued to re-open and we got the vaccines, we expected to see this high-octane, accelerated pace of economic growth through 2021 and into the early stages of 2022.
Now, from a relative/historical context, we can still say we have a strong economy. But I think these downgrades call into question the strength and duration of this economic recovery."
To hear our entire conversation, click the video above.