This week in the markets

  • The Dow Jones Industrial Average (DJIA) took a dive, tumbling nearly 1,400 points Wednesday and Thursday.
  • The Justice Department gave CVS approval to purchase Aetna on Wednesday, in a $69 billion deal that could transform the health care industry.


The Dow had two depressing days

Many investors had their first scares of the Halloween season when the DJIA tumbled nearly 1,400 points over Wednesday and Thursday. The two-day decline left many investors asking what caused the slump?

Speculation on the cause of the steep decline in the DJIA, as well as other major stock indexes, include increased interest rates imposed by the Federal Reserve, and concerns over trade tariffs. The Federal Reserve has raised interest rates six times since December of 2015, which affects the way businesses and consumers access credit. Additionally, higher bond yields may have played a factor, as higher yields can raise borrowing costs for companies and divert investments away from stocks. Other experts say that trade tariffs may have caused investors to worry. Companies like Walmart and General Motors have warned that the rising costs of imports, due to tariffs, could hinder business and hurt the US economy.

The CBOE Volatility Index (VIX), which theoretically quantifies investor sentiment toward the market by measuring the rise and fall of market prices (the index is high when volatility is high, and low when volatility is low), hit its highest level since mid-February, signaling many investors are concerned. Other market commentators believe that this trend could be healthy for the markets after the long positive run-up they have experienced over the last year. The stock market has definitely hit a road bump this week, but historically the overall market has always continued to rise over the long haul.

Don’t be too alarmed by the stock market decline

Although, investors should monitor ups and downs in the stock market, try not to be too alarmed. It’s important to remember that your MoneyLion investment account is diversified to help minimize the impact of market swings. Remember that staying invested through stock market lows is an excellent way to help realize gains when the market starts to increase. Continue to focus on your long-term goals.

CVS got the green light to purchase Aetna

On Wednesday, officials from the Justice Department approved a $69 billion deal for the drugstore CVS to purchase Aetna, the nation’s third-largest health insurance company. The agreement was passed on the condition that CVS sells off Aetna’s Medicare Part D prescription drug business. The combined companies are better positioned to provide community-based clinics and one-stop shopping that would also be less expensive for patients. Now you can grab some chips while you get your checkup.

Not everyone in the health care industry was pleased. The American Medical Association (AMA) released a statement urging the Justice Department to block the merger due to concerns that it would encourage unfair business practices that reduce competition. The AMA fears that the merger could raise prices, reduce choices, and suppress innovation across the industry. Either way, the deal could change health care as we know it.

And now for your weekly Lionomics wrap-up. 🤓

Lionomics: Finance made easy

This week in Lionomics, we looked at whether an actively managed fund can really deliver better performance than a passive fund that tracks an index. The answer may surprise you! We also examined the US stock market and the tendency of investors to have “home bias,” which can inhibit them from tapping into potentially bright opportunities abroad. We then explored those opportunities in our post on international developed markets like Europe and Japan.

Speaking of home … This week, many of us felt some discomfort in our domestic market, as US stocks tumbled. It helps to remember that market swings are entirely normal and in general should not disrupt your longer-term investment goals. Investing is a marathon, not a sprint, after all. 🏃‍♀️

Furthermore, your MoneyLion investment account is allocated across a diversified portfolio of ETFs, including both stocks and bonds, which is intended to help cushion the impact of ups and downs in the market (i.e., volatility). You're in expert hands with MoneyLion and Wilshire guiding your investments every step of the way. Our objective is to help you stay on track to your long-term goals.

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