In this blog, you will learn:

The week hadn’t even begun properly when major technology stocks fell drastically for the third time among the three most-followed stock market indices across the United States. 

Over the past three days, the Nasdaq Composite index went down by a total of 10.03%, the S&P 500 fell by a total of approximately 7%, and the Dow Jones Industrial Average lost by 2.3%. 

In addition to this, Apple, Facebook, Amazon, Microsoft, and Zoom all fell by more than 4%, experiencing the worst three-day stretch since 2008.

How does this concern all of us? The stock market not only reveals the backbone of the economy but also the determination that investors and corporations have in the prospects of a market. 

The more a company’s earnings remain inactive/decline, the fewer chances there are for expanding job opportunities. 

However, single and minor fluctuations in the stock market rarely affect the job market significantly in the short run.

So, how bad is the recent decline? Is it enough to have an adverse and massive impact on the job market?

To fully contemplate the impact of the stock market dip on peoples’ jobs and livelihoods, it’s vital to become familiar with how the stock market works. I’ll admit, with all those numbers and technical names, the stock market is a daunting phenomenon. Thus, I present to you: The Stock Market for Dummies. 

 

The stock market for dummies 

The stock market is nothing more than a giant global network that tends to organize the market place where large sums of money are exchanged.

Over seventy trillion dollars are traded, in the form of stocks/shares, every year, to put this into perspective. Shares/stocks are assets in a company and are traded in the stock market. 

The more a company flourishes and increases its profits, the more the sizes and values of its stocks will grow. The increased public interest helps funds new initiatives and also boosts its overall market value by showing how many people are willing to invest in their idea. 

Since buying stocks makes investors partial owners in the business, they have a massive influence on the fluctuations in the stock market.

If for some reason, a company starts to seem less profitable, investors sell their shares/stocks with hopes of making a profit before the company loses more value. The demand for the shares goes down, and the share price falls and, with it, the company’s value. Plenty of investors might simply sell valuable stocks to pursue personal interests.

Therefore, human confidence in the market has the power to trigger everything from economic booms to financial crises. 

Why did the stock market dip?

There are several reasons for the recent plummet in the stock market.

Investors may be concerned about rising COVID-19 cases, especially since the schools are reopening, and the unfavorable effect it will have on economic restoration.

There is also uncertainty surrounding the November presidential election and renewed US-China tensions.

Additionally, ever since the public was forced to work remotely since March, the stock market saw a massive increase in tech companies like Apple, Netflix and Amazon and companies that supported the work-from-home environment, such as Zoom.

However, many believe tech stocks are entering correction territory for the rest of September. 

Now, it seems that investors are questioning whether those gains were overestimated, and are worried about the ongoing crisis in the US job market. 

Different perspectives on the future of the stock market 

Some investors believe that these pullbacks are temporary instead of a long-lasting decline. Since the current bull market kicked off in March, there have only been two pullbacks.

Tech stocks like Facebook, Microsoft, and Zoom are seeing their valuation and prices rise and did not only receive a boost from the COVID-19 pandemic but are also best positioned to profit when the economy eventually arises from the recession. 

On the other hand, investors are also leaning towards a bare market, where things are extremely uncertain in terms of corona virus resurging as schools reopen, the looming presidential election, and a signal of weakness in the market as two major companies saw their market shares drop.

Effects on the Job Market

Unfortunately, dips in the stock market lead to inevitable consequences on the job market. IF the value of stocks and profits continue to decline, companies will have no choice but to tighten their belts. That may lead to shutting down offices that are not doing well, trimming payrolls, and laying off employees.

However, a silver lining exists. Fluctuations in the stock market are a common occurrence, especially when there is a bull market. Keep in mind that the stock market is a leading indicator while the job market is a lagging indicator. 

Fed Chairman Jerome Powell stated in an interview with National Public Radio that 1.4 million jobs added to the labor market in August and an unemployment rate falling from 10.2% to 8.4% were ample signs of progress in the economy.  

How to adapt to the recent surge in tech stocks and work-from-home environments.

Long before the pandemic hit, the world was tilting towards digitization and automation across all industries and eliminating hands-on labor altogether; the virus just sped this up.

Major companies with vigorous online presences like Amazon, Google, Apple, and Netflix along with companies that support work from home, such as Zoom are on the rise.

Here are a few tips to get on board with emerging job trends. 

1. Take some time to relax and evaluate your situation. No one was prepared for this and you can’t expect yourself to develop a skill set overnight to suit the circumstances and situation. This is easier said than done.

For more advice on how to improve your job search during these trying times, read Coronavirus Job Search – Should You Stop Looking?

2. Expand your skillset. It doesn’t matter what industry you belong to. There will always be room to enhance both hard and soft skills. These include adaptability, tech-savviness, creativity and innovation, data literacy, critical thinking, and digital coding.

If there’s anything this crisis taught us, it’s that the learning should never end. There are a variety of free courses on platforms, such as Udemy, Coursera, and Google.

3. Network profusely on LinkedIn. This includes attending virtual seminars, giving your “two cents” on your job-related experiences and activity, and staying in touch with professionals in your field. 

Make sure to keep your LinkedIn profile updated by following my template here.

You can also check out my networking tutorial here. If it asks you for a password, let me know and I’ll generate one for you.

4. Look more into the world of freelancing and volunteering. Large companies like Google hire lots of temporary and independent contractors. Sign up on different freelancing websites like fiverr.com, freelancing.com, or upwork.com. This will build your market value, nurture industry relationships, and compel you to think like an entrepreneur.

Additionally, you’ll walk away with some great skills to add to your resume. Here’s an article that will show you how to add this experience to your resume.

5. Update your Resume. And, last but not least, keep an updated resume targeted towards the industry you want to move forward in, or possibly begin your career in.

Here’s a cheat sheet to help you begin. It’s safe to say we live in an entirely different world, post-corona, and the job market has gotten way more competitive than we’re used to. It’s time for us to change as well. 

If you need one-on-one help, call me at 714.845.7104.

How do you feel about the change in the stock market? Do you think this is going to hurt the job market as well, or do you feel this will blow over without an effect?

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