Inside INdiana Business is reporting that a University of Indianapolis financial economist says Monday’s dip in the U.S. stock market was not unexpected and is advising Hoosiers not to be concerned. UIndy School of Business Director of External Relations Matt Will calls the fluctuation, which included a record loss of more than 1,175 points by Dow Jones Industrial Average, is an anomaly. “This is a normal drop. It’s a random occurrence. It’ll come right back up,” he tells Inside INdiana Business Multimedia Journalist Mary-Rachel Redman. “There are no fundamentals that are wrong with the economy right now.”
Will advises the business community to take the same no panic approach. “The thing that they (small businesses and corporations) need to be aware of is not the stock market crashing, but more what does this mean for interest rates?” he says. “It probably means an increase in interest rates,” which Will says would add expenses to borrowers. He says earnings are generally up, corporate tax rates are being reduced and Gross Domestic Product growth is higher, which should offset long-term concerns.
He says inflation — or lack there of in this case during the economic recovery — is a major driver of the dip, adding that metrics including credit spreads, default rates on loans and company earnings reports are all in places they should be. Will says consumers and businesses shouldn’t be concerned until they see signs like GPD falling, unemployment dropping and out-of-control inflation. “None of those things are occurring right now, so I wouldn’t be concerned.”