Dow Jones Crashed this Week, Historical Decline

[Birdjaguar]

Concern that Sanders would win the Democratic party nomination.

Not likely until it was clear he had a real chance of getting the nomination. The earliest for that was super Tuesday. The elephant in the room here is the virus/supply chain collapse.

 

[Timsup2nothin]

Not likely until it was clear he had a real chance of getting the nomination. The earliest for that was super Tuesday. The elephant in the room here is the virus/supply chain collapse.

Couldn't prove that by the news after the Nevada primary. Wall Street doesn't really need facts before they start panicking.

 

[FriendlyFire]

Saw this comment on the NYT.

"The stock market sell-off is fake news. The fake media says it is a 10+% downturn. But I think it is far less than 1%. That's just my hunch." Donald Trump

 

[Birdjaguar]

Well the Dow fell 200 points on Friday before the Nevada caucus on news from China. That news got worse over the weekend. The fear Friday was an anticipated 0% growth in the global economy based on China. If you want to think that Bernie's win on Saturday caused a 10% drop in the market, go ahead. None of the news the following week seems to support that.

From the 21st: China’s National Health Commission reported more than 75,000 confirmed cases and over 2,000 deaths on the mainland. More than 800 new cases were reported in China overnight. South Korea has also reported more than 200 cases.

“Even if the outbreak recedes, global growth is still set to fall to zero in the first quarter, before bouncing back over the remainder of the year,” Peter Berezin, chief global strategist at BCA Research, said in a note. “Thus, a near-term hit to corporate earnings now looks unavoidable.”

The spread of the virus is already taking its toll on the Chinese economy. Data from the China Passenger Car Association showed auto sales plummeted by 92% in the first two weeks of February. Some U.S. companies, including Apple, have also warned this week about possible revenue headwinds due to the virus.

From the 26th: Wall Street continued its four days of losing streak as the deadly coronavirus spread 36 countries across the world. On Tuesday, U.S. stocks plunged as investors remained skeptical about global economic growth. All three major stock indexes ended in the red.

The Dow Jones Industrial Average (DJI) slid 3.2% or 879.44 points to close at 27,081.3. The S&P 500 tumbled 3% or 97.68 points to close at 3,128.21. Meanwhile, the Nasdaq Composite Index closed at 8,965.61, shedding 2.8% or 255.67 points. A total of 10 billion shares were traded Tuesday, higher than the last 20-session average of 8 billion. Decliners outnumbered advancers on the NYSE 5.10-to-1 ratio. On Nasdaq, a 4.93-to-1 ratio favored declining issues.

Here is a Bloomberg Businessweek piece from Feb 26, No mention of Bernie.

https://www.bloomberg.com/news/arti...eks-the-right-metaphor-for-the-virus-meltdown

 

[Timsup2nothin]

Well the Dow fell 200 points on Friday before the Nevada caucus on news from China. That news got worse over the weekend. The fear Friday was an anticipated 0% growth in the global economy based on China. If you want to think that Bernie's win on Saturday caused a 10% drop in the market, go ahead. None of the news the following week seems to support that.



Here is a Bloomberg Businessweek piece from Feb 26, No mention of Bernie.

https://www.bloomberg.com/news/arti...eks-the-right-metaphor-for-the-virus-meltdown

Okay, wild swing there.

 

[Colon]

S&P 500 up ~7% for the year. Good going.

 

[civvver]

It's a combo deal making it swing. It helps that it was at its all time high so I think a lot of investors are just taking money off the table in fear of a drop. If it was lower to begin with they might ride out corona virus, trade wars, elections.

 

[El_Machinae]

Yeah, perspective is everything. I was looking at my portfolio, and a lot of my positions are the same price now that they were 3 months ago. Apparently things are just as pessimistic now as they were in December. Except of course, all of the liquidity that happened in the interim

 

[innonimatu]

I don't care the least bit about stock markets, but I guess this thread is as good as any to mention one thing that just occurred to me: some major oil producers seem willing to let the price of oil slide further down during this crisis.

I think that between a health care crisis (building up for a long time but now blowing), a full-fledged services crisis (due to fear of the virus leading to people not using unnecessary personal services), and a fracking industry crisis (even at $50/barrel the operations are unprofitable), the US is in for an "economic shock" way greater in scale than those of 2008. Industrial disruption due to supply-chain problems are not even its biggest problem. Every major economic activity there apart from perhaps agriculture is going to have a terrible year.

 

[Birdjaguar]

Yeah, perspective is everything. I was looking at my portfolio, and a lot of my positions are the same price now that they were 3 months ago. Apparently things are just as pessimistic now as they were in December. Except of course, all of the liquidity that happened in the interim

Yeah, as of tonight, we're down 3% YTD. Not bad. More bad news will be coming for sure. I expect the we'll see more market downturns and lots of volatility.

I don't care the least bit about stock markets, but I guess this thread is as good as any to mention one thing that just occurred to me: some major oil producers seem willing to let the price of oil slide further down during this crisis.

I think that between a health care crisis (building up for a long time but now blowing), a full-fledged services crisis (due to fear of the virus leading to people not using unnecessary personal services), and a fracking industry crisis (even at $50/barrel the operations are unprofitable), the US is in for an "economic shock" way greater in scale than those of 2008. Industrial disruption due to supply-chain problems are not even its biggest problem. Every major economic activity there apart from perhaps agriculture is going to have a terrible year.

Since Jan 6, Brent Crude has dropped from $68.60 to $51.90 with few intermittent ups. $50 is as low as Saudi Arabia wants to go and they are now pushing cutting production to keep prices up. Russia in involved with the OPEC decision coming up but is not enthused about cutting production.

World crude inventories have been rising and storage is getting full. The US is still pumping vigorously. Demand everywhere is falling. Oil is a reactive industry. There will be plenty of oil when needed. There will be lots of stinky economic numbers coming in April and then again in July as quarterly results come in.

 

[innonimatu]

The issue is not any possite lack of oil, rather the opposite. It's serial bankruptcies in the fracking industry because oil prices will keep crashing and the stay low a long time.

 

[Birdjaguar]

The issue is not any possite lack of oil, rather the opposite. It's serial bankruptcies in the fracking industry because oil prices will keep crashing and the stay low a long time.

That hasn't happened yet. But keep in mind that the oil business structured to survive boom and bust cycles. Exxon and its big buddies will be fine. Smaller companies are structured so losses can be segregated from parent company. It's like the movie industry where each film is its own entity P&L wise. Frackers may shut down wells as the supply drops. This is not a new situation for them. There will probably be hard times form lots of workers. NM may well be in trouble. Our new highest ever state budget is tied to oil revenue.

That is why Russia doesn't want to cut production. They want people working and having income rather than profits. Most of Putin's government income comes from energy. In the US Oil companies prefer profits over people working.

 

[Farm Boy]

Talked with a friend tonight. Like an old one. We were been feeling a little bad, especially considering how bad it's been and how suicidally bad it's supposed to continue to be for at least a couple years. But seriously, everything else could come down in cost a little fudging bit.

 

[Birdjaguar]

Talked with a friend tonight. Like an old one. We were been feeling a little bad, especially considering how bad it's been and how suicidally bad it's supposed to continue to be for at least a couple years. But seriously, everything else could come down in cost a little ******* bit.

That bad. We can only guess now how bad and for how long. Also as is usual, some places will recover faster than others. We are breaking new ground and it is time for the government to play its most important role. Unfortunately Trump is not up to it.

 

[Farm Boy]

He never was, he's a reality TV lawn flamingo developer. The guys that follow the Ag experts have been panning him for years. He plays really well will the crossovers that used to be Democrats before the party chose finance over labor and with the super shithead Republicans. Also, the disengaged of intellect that continue with habits. But **** them too.

 

[Birdjaguar]

What does your county depend upon for income?

 

[Farm Boy]

My town really isn't that big, if I narrow it down to county, my career stuff I've posted, my wife's career stuff I've posted...

I'm in one of the (explicitly or umbrella) collar counties of the Chicagoland area. ~1 1/2 hours with traffic, ~half that to the lake without. So depends on your circle. Lots of people who commute all the way to The Lake here, lots of people in higher education, lots of people in skilled trades, lots of people in Ag. My oldest friends are in the agriculture circle. The really good ones are from families that still considered it a necessity to get an education at university to be a full community member and farmer. That's becoming a stupid economic prospect in an era of economic prospects that make people stupid.

 

[Timsup2nothin]

I am sad that someone I like and respect, even if by the standards I was raised under I "don't really know" is taking it in the teeth. Brave new world this internet, full of opportunities for empathy that I never expected to have to put up with.

 

[Farm Boy]

I appreciate it, Tim. We're not doing too bad all things considered*. I'd invest more effort into propping up people who need it more, like the Capital Ts who are both most in need of support and generally also the least sympathetic and most infuriating. Mix the testosterone of a young man, the mental challenges of somebody with a psych defined disorder, the face-value-pushiness of a young woman, and the 1950s perversion assumption of a queer and, yeah. They need the help.

But still. Everything else could cost a little less. I'm ablating with a day job that I hate and goes nowhere until I die. Which my Dad and I agreed was nothing to sneeze at or quit, given.

*I mean, I could probably check out in failure and the kid would have enough to grow into a proper damaged 1-generation shithead with how that works out. That's a luxury, right?

 

[Birdjaguar]

My town really isn't that big, if I narrow it down to county, my career stuff I've posted, my wife's career stuff I've posted...

I'm in one of the (explicitly or umbrella) collar counties of the Chicagoland area. ~1 1/2 hours with traffic, ~half that to the lake without. So depends on your circle. Lots of people who commute all the way to The Lake here, lots of people in higher education, lots of people in skilled trades, lots of people in Ag. My oldest friends are in the agriculture circle. The really good ones are from families that still considered it a necessity to get an education at university to be a full community member and farmer. That's becoming a stupid economic prospect in an era of economic prospects that make people stupid.

Close to Chicago is probably a help but a mixed one if your community depends upon multiple industries. Each may recover differently. Certainly Ag is hard, but important. Lots of others will be a crap shoot. For now we all wait and hope the slide down the siter is short and shallow.

We are quite a confluence of events: 3 years of a troubling president who has kept the nation divided on purpose; a 10 year bull market; a climate crisis; a pandemic; and a hate-filled presidential election made worse by social media. All in 2020.