Monday of this week, Facebook’s stock came under pressure, mainly because of revelations of internal research indicating that the service has deleterious influence and effect on adolescents, especially girls. Many sociologists question the benefits of social media and point to other studies that indicate many harms, including increased isolation, a heightening of poor social skills, and a focus on artificial aspects of relationships, among others.
Because Facebook became the subject of a congressional investigation, some investors sold the stock fearing increased regulation and perhaps other sanctions. It was unclear how far the investigation might go into other “big-tech” practices, so the entire group came under selling pressure. For good measure, many other highly valued stocks were also sold off. The thinking seemed to be, take profits while they were still available.
After a brief recovery, markets came under additional pressure from higher interest rates and fuel prices. Each could be a threat to economic recovery. It almost seemed as if every potential boogeyman was being sought out.
This was actually the culmination of weeks of correction; each concern was just another catalyst. There is also the impending debt ceiling crisis, inflation, even higher interest rates and more; there is nothing new here as these concerns have been reviewed over and over. The Bull has written that a re-evaluation process has been going on for some time and that we should be nearing its end. Only time will tell if this week’s reactions are the final ones, but we should be approaching the end of this. Next up are earnings reports. Let’s see how investors react to them. There is a lot of good happening, it has just been ignored. Real information trumps conjecture every time. Stay steady my friends.
The Lonely Bull