By Julio Gonzalez, M.D., J.D.

October is traditionally a scary month on Wall Street, and this October is no exception as the markets took a tumble to the tune of more than 1,000 points last week, or about 4%. More specifically, the Dow dropped from 26,340.57 on Oct. 9 to 25,025.07 on Oct. 11 with Friday seeing a small increase in the close, yet Monday another small drop.

Now, the question is what will the Dow do next? It is a question made to be of great import, not only for investors, but also for political observers who mull the implications of the market’s performance on the midterm elections.

The issue is resonating even with President Donald Trump as he took to the airwaves to question the wisdom of the actions of the Federal Reserve. For Trump, the market sell-off was a direct result of an excessively aggressive increase in interest rates by the Feds. As an investor and businessman, Trump has always been a market watcher.

But the stock market’s fluctuations are not really point. While walking out to board Marine One, the media shouted questions at President Ronald Reagan about the stock market declining that day or week. Reagan’s timeless reply: “Markets go up and markets go down.” Yes. But the economy was only going up.

In point of fact, and despite the media’s recent obsession with the sell off, last week’s events do not likely represent the beginning of a massive downturn in the market. For one, the salutary effects of the Republicans’ tax reduction have been too great and will be ongoing. That dynamic remains in place.

Further, economic growth is 3% versus one year ago, and the unemployment rate is at a 49-year low of 3.7%. In the meantime, inflation is 2%, a relatively healthy position and wages, even at the bottom end, are finally moving upward. So what affects Americans the most is that the economy is very strong and everyone is benefitting.

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All sorts of developments may steer the market southward. The Asian markets are taking a beating, particularly, China’s, which is down 30% from February. Moreover, America’s economic growth could stop — although that appears unlikely barring a catastrophic event. Inflation could spiral up under the effects of America’s tariffs and the competitiveness of our labor markets. And of course, any unforeseen development in the world stage could throw everything off.

But in reality the American economy is in about as strong a position as it could be at this point in our history.

A clue to how the market will go, will come this week when 55 major companies will be releasing their earning reports. By far, the most significant day of the week is tomorrow when, among others, Netflix will be reporting. If anything, these reports may provide some insight as to the personality of the final quarter of 2018.

Either way, the worst thing an investor or political observer can do at this point is read too much into last week’s events — or the short-term ups and downs of the market. The wisest approach here, as is the case in so many other circumstances, is to stay the course and keep a watchful eye, and be thankful for leadership that has put the economy on such a strong footing.

Dr. Julio Gonzalez is an orthopaedic surgeon and lawyer living in Venice, Florida. He is the author of The Federalist Pages and cohost of Right Talk America With Julio and Rod. Dr. Gonzalez is presently serving in the Florida House of Representatives. He can be reached through www.thefederalistpages.com to arrange a lecture or book signing.

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