Friends
The carnage continues as stocks continue to tumble unabated. As we mentioned, we expected the market to test the lows from earlier in the week and it appears that is exactly what is happening. To put in some kind of near term or intermediate bottom, the earlier in the week lows need to be tested and they need to hold. I would expect stocks to bounce off those lows. If not, we will be probing for more technical levels and moving averages. We are now hovering near a 10% correction.
By the close, the Dow Jones Industrial Average was down 1,032 points to finish the day at 23,860. The S&P 500 was down 100 points to close at 2,581. Gold was up $6 to trade at $1,320 per ounce, while oil was down $1.45 to trade at $60.34 per barrel WTI.
Again, it seems that each tick up in interest rates triggers selling as investors and strategists wrestle with the possibility that the 35 year old bull market in bonds is finally over. What does that mean? We are in a period where good economic news is bad for bonds, which affects stocks. Is this a huge overreaction in stocks? Well, it’s been so long since we’ve seen a bear market in bonds and the fact that we have a TON more debt than 35 years ago globally (thanks to central bank easy money policies for the last 8 years), I don’t think folks know how to model it all. This may take some time to work itself out and there may be additional pain ahead. Is the volatility index the tail wagging the dog, thus causing stocks to fall? There are many factors in play and many questions to be answered. We’ll be here to answer any questions you have and to guide you through these tumultuous moments.
Have a “nice” evening everyone.
