The bad news is the stock market is diving, and nearly all industry sectors are down since the start of the new year.
The good news is Middle Tennessee has a diverse economy and is not largely tied to the energy sector, which is hurting most acutely.
“There really hasn’t been any place to hide,” said Stephen Frohsin, a principal at Woodmont Investment Counsel. “With the exception of some utility stocks, most every sector and industry has been hit about the same.”
The Dow Jones and S&P 500 continued their slide this week, only slightly correcting by end of trading Wednesday. The decline is among the worst starts to a year of trading in history, with China’s slowing economy, a drop in oil prices and concerns about rising interest rates all contributing to the downturn.
The Nashville economy is more insulated because of its ties to health care, an industry that does not see demand weakened by poor markets, Frohsin said. But, as people begin to consider the damage to their 401(k)s, they are likely to rein in spending, which could have a broader impact on the local business sector.
“A lag effect will happen now when people look at their 401(k)s or they look at their portfolios and they see the portfolio was worth 10 percent less this month,” Frohsin said. “That can certainly have an effect on consumer spending from everything from restaurants to real estate to automobiles. The risk is this: If this market stays down for longer than people expect, then you will absolutely see the decline of the stock market will affect consumer behavior.”
Despite January’s stock volatility, Anna Page, owner of Nashville’s decades-old Rebel Hill Florist, said she hasn’t noticed (continue reading at Tennessean)