Bull Market officially over!! Year heading negative.

[Bdatik]

These last two minutes have been brutal.

[We are covfefe]

Down over 2,000 points today. That's a yikes if I've ever seen one.

[Breccia]

I swear, if I were watching the stock market closer I'd be getting whiplash by now with how it keeps jerking up and down.

Yeah, the DOW's getting a workout tonight. Probably's gonna need a cigarette after.

Also, because it might be important soon: What's a bear market and why are stocks about to enter one?

The plunging Dow Jones industrial average – which was down by more than 2,000 points in trading Monday -- is a symptom of a battered market trying to handicap how bad the coronavirus-led hit to the economy will be. Other signs of trouble include today’s 20% drop in oil prices and the yield on the U.S. 10-year Treasury—known as a haven in tough times—falling to a new record low of 0.38%, down sharply from its recent 52-week high of 2.67% in March 2019.

It’s not officially a bear market yet, but it sure feels like one.

No longer a parody.

“Where do you begin on a day like today?” Craig Erlam, senior market analyst at OANDA Europe noted. “It’s absolute carnage out there.”

“Is this the start of a bear market? In my firm’s eyes, we say, ‘yes,’” says Michael Foguth, founder of Foguth Financial Group in Brighton, Mich. “The coronavirus, the election, the interest rate decreases, (and plunging) oil prices are all reasons we believe this (is a bear).”

Trading action is expected to stay volatile until Wall Street gets more clarity on how many people are infected in the U.S., what steps government policymakers may take to both contain the spread of the virus and assist businesses hurt by economic disruption, and what the long-lasting damage to corporate earnings will be.

What’s a bear market?

A bear market is defined as a drop of 20% or more from a prior closing high. At the Standard & Poor’s 500 low of 2,740.35 Monday morning, it was down 19% from its Feb. 19 record high of 3,386.15.

It is a period of declining stock prices in which a broad market gauge like the S&P 500 falls 20% from a prior high. Bears normally are caused by a recession, black swan events like the coronavirus, wildly optimistic investors, ridiculously overpriced stocks or interest rate shocks that cause economic contractions. These downdrafts are normally accompanied by rising investor fear levels as losses mount.

The current sell-off has been sparked by massive uncertainty caused by the coronavirus. The market hit fresh highs less than three weeks ago but has been overtaken by the negative coronavirus headlines.

Today’s rout and the 1,000-point Dow drops in recent weeks had all the hallmarks of panicky investors trying to avoid losses.

Whether Monday's massive sell-off after the opening bell represents any type of short-term bottom is difficult to know, market experts say.

“News is often terrible at a bottom and likely will get worse,” Mark Arbeter, president of Arbeter Investments, said via e-mail. “The bottom will come when the market starts to ignore the negative headlines.”

If – and it’s still not certain it will--the S&P 500 drops 20% and a bear market becomes official, it would mark the end of good times on Wall Street. On average, these bear market drops, which are feared by investors, last 21 months and result in 40% declines, according to an S&P Dow Jones Indices analysis of the 13 S&P 500 bear market since 1929.

"I'm thinking blue chips, Bob. Not sure why."

The continued slide in stock prices means the pain in investor portfolios is spreading and adding up to real money. An investment of $100,000 in the S&P 500 at the market peak on Feb. 19, was worth about $18,700 less at the market’s intra-day low Monday. [EDITOR: Yeah thanks USA Today, I didn't know how percents and subtraction work. Thanks for treating me like a fuckin' idiot.]

After more than a decade of rising stock prices aided by cheap money and zero-percent interest rates provided by the Federal Reserve, the market is undergoing a violent shakeout. That's because the coronavirus has led to both a supply and demand shock to the global economy, a kind of “economic freeze” that causes sales and earnings to contract.

Investors fear a recession is looming. And the recessions aren’t stock market-friendly. In the past 12 recessions since World War II the S&P 500 has tumbled an average of 27% in a top-to-bottom decline that lasts 13.5 months, CFRA data show.

While the Fed announced an emergency rate cut last week to shield the economy from the negative drag caused by coronavirus panic, it hasn’t been able to arrest the market’s fall. Monetary policy is not viewed as the best tool to combat a crisis of confidence caused by the coronavirus. Cheaper money might be able to reduce market dislocations, but it can’t stop the spread of the virus or create a vaccine.

Wall Street is looking for the U.S. government to issue fiscal remedies, such as low-cost loans to small businesses, payroll tax cuts to put more dollars in workers’ pockets, and other measure to ease the financial fallout on Main Street and Wall Street.

Few stocks have been spared from the rout.

Bear markets are not your friend, but there's nothing magical about 20% that makes people say "Oh thank goodness it stopped at 19%". This isn't a plane that nearly ran out of runway, it's a continuous data set. As the article later explains, the bear market ends when people who are motivated by caution, fear, or panic stop selling, and those who rode it out (and ambitious, risk-taking newcomers) reverse the direction. This happens both sooner and more effectively with good news on the horizon. In the US and many countries, that is not happening with the coronavirus, and in the US, it wasn't happening with the rest of the economy, either. And even one of the normal ways out, bonds, is paying less and less because everyone already flocked to that already.

Nancy Davis, chief investment officer at Quadratic Capital, summed up the market this way in an email. “The word of the day is contagion,” Davis said. “The biggest fear investors have right now is that this sell-off is different than others.”

They should be. Because Trump.

23,845.47 −2,019.31 (7.81%) at time of clicking Subm--

[Shadowferal]

2,023 points down...

[Thepersona]

2,023 points down...

2116 at the time of writing...

[Shadowferal]

Offical at 2018..7.8%

Winning bigly!

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o wait...2015...numbers...

[Zan15]

What factors do you think would appear now that wouldn't already play out in 2014-2015 oil price drop + international lending restrictions?

a panic driven market because of the virus. Supply restraints. much lower interest rates in reserves.

there was not a major route in the markets in 14-15.
There was not this level price war and vitrol between the two majors

they blew through their reserves last time too quicker then planned, even had problems in 2017 without a major price war.

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I believe we're officially in a Bear market now.

Ah nope... But we're super close-

Dow Bear - 23,641.1, Now - 23,849.20 -2,015.58 7.79%
S&P Bear - 2,708.92, Now - 2,746.15 -226.22 7.61%

in order to be officially a bear market its gotta include nadaq. they are the reason why it (bull market) hasn't ended three times before this


Nasdaq - 7,870 , Now 7,950

[anveena]

Hopefully the stock markets keep dropping in the following days. I need gold to hit $1800+

[Breccia]

o wait...2015...numbers...

Not quite, but we are in 2017 numbers. Nov 2017, just to be clear.

(I know that's not what you meant, but I was going to post that info anyhow)

[Shadowferal]

Dow closes down 2,000 points in largest daily point loss ever

Obama's fault, right?

[Breccia]

Trump now owns the top 11-ish largest drops in market history...first 2k drop ever.

The only reason we can't say "Trump now has a drop more than any other drop, plus any other drop" was because he has two in the 1100-1200 range. In other words, the only reason I can't say something damning is because I have to say something slightly less damning.

strange I have not heard anyone talking about how much more amazing their 401k has been vs under Obama...in weeks....

I won't quote specific people, though I admit I came close three times and deleted them all. But bear in mind (puns HARDEE HAR HAR) that there are conservatives out there who aren't part of the rabid fanbase, including the rich and self-interest-focused. Odds are, they're not stupid enough to come in here and try to spin this. They're going to hide under a rock or something until this is all over. Hope they brought a snack, it could be a while.

[Belize]

I leave the country for 1 week and shit hits the fan.

Come on guys.

[Zan15]

I leave the country for 1 week and shit hits the fan.

Come on guys.

lol its been dropping for more than a week....

but I am willing to blame you, I am bored of pointing fingers at the real problem :P

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Dow closes down 2,000 points in largest daily point loss ever

Obama's fault, right?

they will find some kind of financial regulation that really means nothing, to blame it on...to blame their inability to find a solution, to counter, to act...…
just like they did with the virus

[Shadowferal]

Sounds like more steep losses forthcoming.

[Breccia]

FOX News' new headline.



We've gone from "meltdown" to "nightmare"

[Zan15]

The only reason we can't say "Trump now has a drop more than any other drop, plus any other drop" was because he has two in the 1100-1200 range. In other words, the only reason I can't say something damning is because I have to say something slightly less damning.



I won't quote specific people, though I admit I came close three times and deleted them all. But bear in mind (puns HARDEE HAR HAR) that there are conservatives out there who aren't part of the rabid fanbase, including the rich and self-interest-focused. Odds are, they're not stupid enough to come in here and try to spin this. They're going to hide under a rock or something until this is all over. Hope they brought a snack, it could be a while.

the problem is like any other tracking you need to look at these drops after key changes.

the drops in 1929-30's and the changes made after is one group
1987-1990's and the changes made after, breakers, stop gaps....is another group
2009-2010 changes to current is the last group.


its the same reason when they talk about biggest debt increases they say Obama in "post war" "current generations" etc etc. Why they say unemployment post war....3% gdp non war time and not include every president ever....

in the current stock market version 3.0, this would be top 5 biggest losses ever in terms of %, maybe even 3.


its also cute trump supporters are quick to say "number down does not matter its the %"....but when attacking Obama for debt increases they want to go off the number increased vs the %....because Bush and Reagan actually had larger % debt increases than Obama (96% vs 101% vs 184%)

[draynay]

FOX News' new headline.



We've gone from "meltdown" to "nightmare"

Good God, are people really going to Dr. Oz for coronavirus info?

edit - don't let my facepalming derail you

[Shalcker]

I don't see anywhere in that report what they are getting for what they have on hand or performance for the period. its also over a year old.

.4% would be going forward not on what they currently have.

It's there on page 6, Table 2 - Return on bank of Russia foreign exchange assets* in april 2018 – March 2019 (% p.a.)

.4% On what part of their foreign currency mix?

Judging by current gold trajectory they'll likely get a lot better returns on their gold reserves too.

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a panic driven market because of the virus. Supply restraints. much lower interest rates in reserves.

Euro part was already running at negative rates.

there was not a major route in the markets in 14-15.

There certainly was one in Russian markets.

There was not this level price war and vitrol between the two majors

Oil price dropped regardless.

they blew through their reserves last time too quicker then planned, even had problems in 2017 without a major price war.

Who blew through their reserves? Saudis?

Because Russian international reserves grew through last few years.

[Zan15]

It's there on page 6, Table 2 - Return on bank of Russia foreign exchange assets* in april 2018 – March 2019 (% p.a.)

.4% On what part of their foreign currency mix?

Judging by current gold trajectory they'll likely get a lot better returns on their gold reserves too.

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Euro part was already running at negative rates.

There certainly was one in Russian markets.

Oil price dropped regardless.

Who blew through their reserves? Saudis?

Because Russian international reserves grew through last few years.

March 2019. so a year old.

30% performance was -.34% EU
23.6% performance was + 1.72 US

since then the same treasuries have seen their values drop by 50%.

Any reserve is always rolling over their investments upon maturity so since march 2019 report you can expect their performance has dropped quite a bit.



Russia did from 2015 to the end of 2017 before recovery to where they are now.

[Shalcker]

March 2019. so a year old.

30% performance was -.34% EU
23.6% performance was + 1.72 US

since then the same treasuries have seen their values drop by 50%.

They only had 24.3% of US Treasuries in March 2019 and i think it dropped even lower since that.

Any reserve is always rolling over their investments upon maturity so since march 2019 report you can expect their performance has dropped quite a bit.

They aren't there primarily to provide "return on investment" (though it certainly helps when they can), they are there to cover any major liabilities/interventions they might need to maintain relative financial stability.

Russia did from 2015 to the end of 2017 before recovery to where they are now.

CBR used reserves in 2014-2015 and then from 2016 it only grew year by year, so i'm not sure what you're talking about really.

Perhaps Sovereign/National Wealth Fund rather then reserves? But that doesn't seem to match either.