MLIV Question: Stock Rout Biggest Driver

In October, both the Federal Reserve and US Treasury created a financial squeeze, leading to higher US yields and a modest decline in the overvalued SNP market. The market, heavily invested in growth sectors, faced pressure from rising rates. With low liquidity and central banks withdrawing equity, the economic environment is adjusting to slower growth compared to 2017, with many companies missing revenue targets.

What was the primary cause of the financial squeeze in October?

• Rising unemployment rates

• Actions by the Federal Reserve and US Treasury

• Increased consumer spending

• Decreased international trade

How did the market respond to the overvaluation of the S&P?

• It collapsed completely

• It increased significantly

• It decreased modestly

• It remained stable

Which sector was primarily affected by higher rates?

• Energy

• Healthcare

• Growth

• Technology

What is one of the challenges mentioned in the current economic environment?

• Excessive liquidity

• High consumer confidence

• Strong growth similar to 2017

• Shortage of US dollars

What is a significant issue faced by companies during earnings sessions?

• Exceeding revenue expectations

• Missing revenue targets

• Reducing operational costs

• Increasing market share