Dipping American stock prices caused a ripple effect on world markets Tuesday and Wednesday, as analysts predicted more instability soon. The U.S. mortgage market is the source of the current concern, which some stock-watchers believe portends a “bloodbath.”
Analysts said that market volatility was likely to continue, especially as many markets and stocks had climbed to their highest levels in more than six years.
Lee Cheng Hooi of EON Capital said that the worry for investors was that the problems in the US mortgage market could cause the world’s biggest economy to slow down.
“This will cause a domino effect on the world economy,” he explained. “There could be more bloodbath to come.”