The correction on the American stock market is attracting more attention. The Dow Jones Industrial Average, a key market indicator, has fallen by over 200 points over the last four days. This is the first time in the 119 year history of the DJIA that it has fallen so sharply.
There’s nothing surprising about the correction: it’s rather a natural process. The American economy is less in need of stimulative measures. In October of last year, the Federal Reserve ended its quantitative easing program QE3 and a rise in interest rates is expected by autumn. Due to this, the stock market has become more unattractive for investors. Trading participants believe the US markets to be overbought and this belief is confirmed by the outflow of capital from the SPDR S&P 500 ETF Trust. As autumn approaches, a wait and see attitude seems the best option. In September the business season opens and who knows what it’ll bring. The correction this year has come early, stimulating a fall for the Asian markets.
However, in this situation investors can make money using structured products with a high capital protection level. One of our investment ideas proposes a situation where the NASDAQ falls further and leads to a 35% annual return in USD for investors.