SPARTANBURG,S.C. (WSPA) – 7 News spoke with an Upstate financial advisor to get some perspective on Monday’s developments on Wall Street.
Dan Foster, of Raymond James Financial Services in Spartanburg, said what happened to stocks as the market opened Monday morning really has to do with the dispute between oil producing nations that came to a head over the weekend.
Foster also said there’s more to it than just that.
He said markets have always reacted to outbreaks like coronavirus and SARS in similar fashion but if he had to compare what’s happening now to another time it’s the aftermath of 9/11.
“You see fear start to build up. You see the market start to sell off, the interest rates start to fall, the economy going into a rut then you come out and then everything gets healthy again. That’s the reason why people say corrections in the stock market are very normal and natural. They are. It just doesn’t feel good,” Foster explained.
If there’s any “good” in the current state of things, Foster said it’s the lower gas prices.
He explained that means people will have more disposable income but because of COVID-19’s negative impact on travel, restaurants, and entertainment industries. The money may not be spent there.
On the flip side, Foster said the housing market will continue to boom, especially with interest rates being the lowest they’ve ever been on record.
“So as a result, not only do we have lower interest rates but now we have a refinancing of mortgages, and what you can see in the housing market is that it’s on fire,” he said.
Foster said as long as everybody’s working, things should be fine. But there is one number investors have their eagle eye on.
“People filing for unemployment claims. Think about it. If you’re filing for unemployment claims, that means I’ve been laid off. If they’ve been laid off that means there’s less demand for the company’s product they’re working for,” he said.
7 News asked Foster if investors react and make decisions based on how the national media is covering a story like coronavirus.
He said that’s never taken into consideration and that’s certainly a factor that drives the market.