Inside StoryMon-Fri 6:30pm ET/3:30pm PT
Carlo Allegri / Reuters

What is the market saying about the economy?

Trillions of dollars have been stripped from the value of stocks traded on the big US exchanges this month

The U.S. economy has been rebounding — if slowly — since the depths of the Great Recession. But that growth is not strong enough to lift the global economy. Germany just slashed its growth forecast, and fear of a triple-dip recession in the eurozone is making markets nervous. Since last month, U.S. stocks have lost more than $2 trillion in value.

What causes volatility? Fear and uncertainty. Markets don’t like uncertainty, and there are plenty of unknowns shaking confidence. 

"There's oil, ISIL [the Islamic State in Iraq and the Levant], concern about central banks," said David Gaffen, the U.S. markets editor for Reuters. "Europe is clearly in a terrible position. But Ebola is a real pressure point right now, so you're seeing people selling the airlines and travel-related stocks.”

But hold on. Why should the U.S. be worried about Europe’s economy? There’s plenty of good news here in the States. Interest rates are still at rock bottom. Mortgage rates are dropping again. The unemployment rate and claims for jobless benefits are the best we’ve seen in a decade. And in terms of gas prices, many Americans are now paying less than $3 a gallon. 

For now, lower gas prices might make you feel better, but take a broader view. Yes, we’re producing more gas in the U.S., but world demand is shrinking because of a slowing global economy. The benefits to your wallet now could be offset later if our economy falters. 

Is the new fear in the markets just a reality check or a correction of sorts? 

Or is it time to reset our expectations after years of soaring stocks? 

What are global markets and investors trying to tell us?

We consulted a panel of experts for the Inside Story.

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