This column originally appeared on Real Money Pro at 9:39 a.m. EDT on May 21.
NEW YORK (Real Money) -- After traveling for most of last week, I wanted to address the two most important questions facing investors and traders:
- Why has the market plummeted?
- What is the market's outlook?
Why Did the Market Plummet?Europe: Above all, the eroding eurozone has taken a toll on the markets. With the benefit of hindsight, the surprising Greek election (several weeks ago) was the catalyst to the downturn. as fears of a Greek exit from the eurozone have intensified. Investors are now fearful that the debt contagion will spread across Europe. U.S.: The U.S. economy, though still apparently on track for a muddle-through trajectory of growth, continues to limp along. Several regional ISMs were disappointing (but really not that surprising). Payroll growth remains tepid. Moreover, an uncertain November political outcome, fears of more divisive and partisan leadership (leading to another debt debacle similar to August, 2011) and questions regarding follow-up policy decisions (in an attempt to reduce our burgeoning deficit) haunt investors.
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