11:53 a.m. ET, August 7, 2019
Market volatility is here to stay -- but this isn't 2008
From CNN Business' Paul R. La Monica
The sense of calm that prevailed on Wall Street for much of 2019 is ancient history. Investors are now very nervous about the US trade war with China and that's unlikely to change anytime soon, according to Randy Frederick, the vice president of trading and derivatives for Charles Schwab.
Frederick told CNN Business Wednesday he thinks volatility is here to say. Investors should expect big moves (both up and down) depending on the latest headlines.
The good news? Frederick does not believe stocks are primed to plunge into a brutal bear market like in 2008. Why? Consumers are still spending. Earnings have remained solid. And the US-China trade war is a well-known risk, not a proverbial black swan.
That said, Frederick thinks that if President Trump does follow through with his threat to impose more tariffs on Chinese-made consumer goods on September 1, then that could lead to a market correction of more than 10%. The S&P 500 is now about 6% below its all-time high.
There is another leg down in stocks if the new tariffs come into effect. That could wipe out corporate profits from earlier in the third quarter and hurt retailers and consumers. That's not priced into the market yet," Frederick said.