Stock Market Nosedive...

Lord Jim · Post by **Lord Jim** » Sat Dec 22, 2018 11:42 am

Dow's worst week since 2008 financial crisis; Nasdaq closes in bear market

New York (CNN Business)The Dow just suffered its deepest weekly plunge since 2008 and the Nasdaq is officially in a bear market.

The miserable performance reflects deepening fears on Wall Street of an economic slowdown and overly-aggressive Federal Reserve.

The Dow closed 414 points, or 1.8%, lower on Friday. The Nasdaq plummeted 3%, closing in its first bear market since the Great Recession. And the S&P 500 shed 2.1%.

Technology stocks fell Friday on continued negative sentiment about the US-China trade relationship, regulation and a general adversity to risk. Facebook (FB) slumped 6%, Apple (AAPL) declined 4%, Twitter (TWTR) lost 7% and Netflix (NFLX) fell 5%.

For the week, the Dow lost 1,655 points, or 6.9%. That's the steepest weekly percentage loss since October 2008. The Nasdaq plunged 8.4% on the week, its worst since November 2008. And the S&P 500's 7.1% weekly loss was the worst since August 2011.

All three major indexes are down more than 12% in December. Stocks are on pace for the worst December since the Great Depression. [That's "Depression" not "Recession"]

Oil, the Russell 2000, the Dow transports index, and stock markets in China, Italy, Germany, Japan and South Korea are all in bear markets, too.

Investors are worried about the prospect of a global economic slowdown. Political chaos from Brexit, a looming US government shutdown and the resignation of US Defense Secretary James Mattis are stoking fear, too. And the Federal Reserve added to those concerns this week by signaling that its rate-increase plan will continue into 2019 despite downgrading its economic growth forecast.

https://www.cnn.com/2018/12/21/investin ... index.html

Trump had really better hope that this trend reverses itself and doesn't start to spread to other economic indicators like GDP, and job and wage growth...

His approval ratings, (low as they have been by historical standards) have been propped up by a strong economy; if the 401K Trumpers (those "supporters" who have been holding their noses and overlooking all of his vile deeds only because of a strong economy) start deserting him, he'll drop from the low 40s to the low 30s or the high 20s pretty quick...

The levels needed for a successful Impeachment...

datsunaholic · Post by **datsunaholic** » Sat Dec 22, 2018 9:27 pm

The Trumpanzees won't abandon him, they'll just blame the Democrats taking back the House as the reason.

Joe Guy · Post by **Joe Guy** » Sun Dec 23, 2018 2:23 am

It's Obama's fault!

RayThom · Post by **RayThom** » Sun Dec 23, 2018 3:55 am

No, I read it as merely a market correction. All the fundamentals are still good.

Lord Jim · Post by **Lord Jim** » Sun Dec 23, 2018 11:51 am

The Trumpanzees won't abandon him

No they won't, but the true Trumpanzees ...or as I also call them "The 5th Avenue Trumpers"...the one's who really would still support him if he shot someone in the middle of 5th Ave...the ones who support him because of his vileness, rather than in spite of it...(the latter being the case with the aforementioned "401K Trumpers")

only represent around 20% of the overall electorate...(That's the percentage that consistently shows up in polling saying they "strongly" support Trump, or give completely batshit crazy answers like saying that they are "proud" of his behavior as President, or that they believe he is unifying the country...)

Impeachment can be successful without them...

Burning Petard · Post by **Burning Petard** » Sun Dec 23, 2018 12:22 pm

I think Trump will still be POTUS two years from now. The econ reality will be spun to blame the nasty Eastern/Coastal Elites, including the Fed. The GOP will reap the benefits of their long-term planning stuffing the lower fed courts and working the numbers skillfully in high-tech gerrymandering. More than a third of the senate will be from those states where the 5th Ave Trumpers still dominate. Fake news spread by the online social media, even without any coordination or 'collusion' will be ever more effective. The Dems may or may not take the White House in the next election, but damage will still be done to domestic Federal programs and our international relations--the GOP party is blind to their own traditional policies of fiscal conservatism, and international military alliances. The principles of GOP saints Eisenhower and Goldwater and Reagan will be treated the same way Jesus is treated by Christian Identity Movement. By the time that next presidential election rolls round, air and water quality, cost of health care, infrastructure, 'the greater good' will all be trivial for the GOP.

snailgate

ex-khobar Andy · Post by **ex-khobar Andy** » Sun Dec 23, 2018 2:30 pm

He's already, and predictably, blaming the Fed. This is the man who proclaimed himself as the King of Debt and there is a grain of truth in that. In the real estate world, there is no better way to make money than to use OPM (Other People's Money) at very low rates, leverage the hell out of it while creaming the profits for oneself while (sometimes) paying back the original investors. Of course if you can declare bankruptcy for one of your many convenient companies through which the loans were funneled, it's even better.

OPM + low interest rates = heaven.

Lord Jim · Post by **Lord Jim** » Mon Dec 24, 2018 8:58 pm

Thank God we have a President who's a very stable genius:

Stocks plunge before Christmas after Trump again attacks Federal Reserve

President Donald Trump's attacks on the Federal Reserve spooked the stock market on Christmas Eve, and efforts by his Treasury secretary to calm investors' fears only seemed to make matters worse, contributing to another day of heavy losses on Wall Street.

The major stock indexes fell more than 2 percent Monday, nudging the market closer to its worst year since 2008. Stocks are also on track for their worst December since 1931, during the depths of the Great Depression.

The market has been roiled for most of the month over concerns about a slowing global economy, the escalating trade dispute with China and another interest rate increase by the Federal Reserve.

The past two trading days, however, have been dominated by something else: major losses following tweets from the president criticizing Fed Chairman Jerome Powell and the central bank.

Trump's Monday morning tweet heightened fears about the economy being destabilized by a president who wants control over the Fed.

"The only problem our economy has is the Fed," the president tweeted. "They don't have a feel for the Market, they don't understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can't score because he has no touch — he can't putt!"

Peter Conti-Brown, a financial historian at the Wharton School of the University of Pennsylvania, said: "We've never seen anything like this full-blown and full-frontal assault. This is a disaster for the Fed, a disaster for the president and a disaster for the economy."

On Sunday, Treasury Secretary Steven Mnuchin made a round of calls to the heads of the nation's six largest banks in an attempt to calm jitters, but the move only raised new concerns about the economy.

Trump's latest remarks only created more uncertainty for already unnerved investors who have seen all of this year's stock market gains evaporate.

The S&P 500 index slid 65.52 points Monday, or 2.7 percent, to 2,351.10. The benchmark index is now down 19.8 percent from its peak on Sept. 20, close to the 20 percent drop that would officially mean the end of the longest bull market for stocks in modern history — a run of nearly 10 years.

The Dow Jones Industrial Average sank 653.17 points, or 2.9 percent, to 21,792.20. The Nasdaq skidded 140.08 points, or 2.2 percent, to 6,192.92. The Russell 2000 index of smaller-company stocks gave up 25.16 points, or 2 percent, 1,266.92.

https://www.chicagotribune.com/business ... story.html

rubato · Post by **rubato** » Sat Dec 29, 2018 1:34 am

A good time to buy equities is just after a large correction.

yrs,
rubato

ex-khobar Andy · Post by **ex-khobar Andy** » Sat Dec 29, 2018 11:35 am

Agreed; but when is the correction coming?

rubato · Post by **rubato** » Sat Dec 29, 2018 8:01 pm

Pretending to time the market is a mugs game. After a large correction (as has occurred) dollar-cost average your increase in equities over an interval of a few months. Trying to hit the absolute bottom is foolish when you can be sure that you are buying well below recent market rates. You are certain to do very well in the coming recovery.

yrs,
rubato

ex-khobar Andy · Post by **ex-khobar Andy** » Sat Dec 29, 2018 9:52 pm

ex-khobar Andy wrote:Agreed; but when is the correction coming?

OK Rube - I was being slightly facetious, but I am not sure that what we are seeing at the moment is yet a correction. Firstly, it is more than 10% below the high (DJIA and other indices) which is the minimum requirement for a correction and which has occurred 36 times in the last 38 years. So it's not uncommon.

But the second feature of a correction is that it's due to temporary factors and I am not sure that this is the case at the moment. I think that once we get rid of Trump the market will start going back up again for the simple reason that there is a constant demand - 401K buyers will want $X billion of stocks every month and that money has to go somewhere. I think that while it dawns on investors that a tax break - which instead of being used to invest and to pay the workers more, as promised, is being used by companies to buy back their own stocks - has increased the federal deficit mightily which is NOT a good thing, we will see more investment in gold, art and property. This has not escaped Trump's attention - he holds a lot of property. And companies who have bought back their own stocks which ought to increase the price (increased demand created = increased price) will have seen prices going down. So they will have to place a loss in their accounts for the quarter (if you spend $1 billion on your own stock and it ends up being worth $900 mill at the end of the quarter, you will have to find a home for that negative $100 mill in your accounts) and that demand will come off the market.

So there is a way to go yet; but those of us in it for the long haul will be OK - not just yet, though - on the assumption that Trump's damage will be evident for no more than a few years.

It will be a correction in a month or two when the loss from the peak is nearer 20%.

rubato · Post by **rubato** » Sun Dec 30, 2018 6:50 pm

The stock buy-back has been going on since 2001.

"is due to temporary factors" is a tautological statement. All changes in the market are due to temporary factors. If one is buying into an asset class doing so at a relative low is desireable and this is a relative low. No help to me because I've been 'all in' on equities for a long time but helpful for many others none the less.

yrs,
rubato

Lord Jim · Post by **Lord Jim** » Thu Jan 03, 2019 9:07 pm

Dow slides after Apple delivers bombshell China warning

US stocks dropped sharply on Thursday after Apple warned it will badly miss its quarterly sales forecast because of weakening growth and trade tensions in China. Apple (AAPL), among the world's most widely held stocks, plummeted 10% and fell to the fourth-biggest public company behind Amazon (AMZN), Microsoft (MSFT) and Alphabet (GOOGL).

The news sent shudders through global markets. The Dow plunged as much as 677 points, or nearly 3%. In late afternoon action, the index was down about 600 points. [It closed down 660 points] The S&P 500 lost 2.2%, while the Nasdaq declined 2.8% and flirted with bear market territory.

US stocks took another hit after the December ISM US manufacturing index plunged by the most since October 2008. The closely-watched barometer of factory activity tumbled to a two-year low, providing further evidence of slowing growth and pain from the US-China trade war. ISM said manufacturing activity is still growing, but suffered a "sharp decline" last month.

"Awful, and worse to come," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote to clients on Thursday. "Trade wars are not easy to win."

https://www.cnn.com/2019/01/03/investin ... index.html

ex-khobar Andy · Post by **ex-khobar Andy** » Fri Jan 04, 2019 1:46 am

"Awful, and worse to come," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote to clients on Thursday. "Trade wars are not easy to win."

Fake news. Trade wars are easy to win - Trump told us so.

ex-khobar Andy · Post by **ex-khobar Andy** » Fri Jan 04, 2019 2:12 am

rubato wrote:The stock buy-back has been going on since 2001.

"is due to temporary factors" is a tautological statement. All changes in the market are due to temporary factors. If one is buying into an asset class doing so at a relative low is desireable and this is a relative low. No help to me because I've been 'all in' on equities for a long time but helpful for many others none the less.

yrs,
rubato

Taking this one at a time.

"The stock buy-back has been going on since 2001. " If your point is that companies have often bought back their own stock, that's a truism and of no particular relevance. Stock buy backs hit $1.1 trillion last year and that's a record.

""is due to temporary factors" is a tautological statement." Look up tautology, Rube. It means saying the same thing twice in essentially different ways. If you disagree with my point - that's fine, but it isn't tautology and you're wrong to say it is. (Did you see what I dd there?)

"All changes in the market are due to temporary factors." Well yes; but my point was that I am not sure that we have reached the bottom of this correction - there is more down to go (that's a tautology) but the overall direction will continue up once Trump's fingers come out of the pie. Let the Fed do what it does well and maybe, just maybe, someone will see sense and stop this ludicrous trade war posturing. Maybe enough of Trump's rich buddies will realize that a tax cut which increases their annual income by 10% (tax cuts) but bites into their accumulated wealth by 20% (stock market decline) isn't such a clever thing.

"If one is buying into an asset class doing so at a relative low is desireable and this is a relative low." Wait - is it buy low and sell high? You mean I've been doing it wrong all this time?

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