On Thursday, the stock market plunged near bear country following a scare by the Federal Reserve that it would change its policy path, according to CNBC. The plunge follows a drop in stocks since October and is showing to result in the worst December since 1931.
"It is entirely possible that looking out over the next three to six moths this correction turns into what you would call a bear market because of the fact that the Fed really didn't show sufficient sensitivity to the affect of policy tightening on the speed of asset price changes to the downside," said Julian Emanuel, chief equity and derivatives strategist at BTIG.
Analysis by CNBC stated that the plunge has resulted from fear of the Fed’s spike in interest rates as well as trade negotiations between the U.S. and China. Not only this, but another concern for markets is a slowdown in earnings growth which may be down as much as 20 percent in 2019 than it was this year.
Ed Keon, the Quantitative Management Associates chief investment strategist, spoke on his forecast of the market:
"We remain cautious. We think the market could get worse before it gets better. I still expect a positive year next year, but maybe something like 5 percent. You can get 2 percent in cash, without the volatility. ... So far we've been selling into rallies and whether we continue to do that, we'll have to see what the options look like."