Posted on 06/12/2020 9:17:54 AM PDT by SeekAndFind
Stocks got smoked on Thursday.
When the bell rang on Wall Street, all three major indexes were down more than 5%. The Dow fell 6.9%, or 1,861 points, while the S&P 500 fell some 5.9%, or 188 points. By day’s end, all of the S&P 500’s gains in the month of June had been wiped out.
The reversal in markets — which followed two mixed, but not terrible sessions for the market — was swift and left many asking the age old question: why?
To our minds, four distinct stories converged during Thursday’s trading session, each contributing what became an ugly picture for the stock market.
The first pillar of this is what we heard from Federal Reserve Chair Jerome Powell. On Wednesday, Powell’s final comments during his post-FOMC press conference referenced the stock market and asset prices.
“We're not looking to achieve a particular level of any asset price,” Powell said in response to a question from Bloomberg’s Michael McKee.
“What we want is investors to be pricing in risk, like markets are supposed to do. Borrowers are borrowing, lenders are lending. We want the markets to be working. And again, we're not looking to — to a particular level.”
The Fed’s latest interest rate forecasts released Wednesday also indicated that interest rates would remain at 0% through 2022, news that put the banking sector under pressure. And this drop in financial stocks upset one of the market’s hottest trades in recent weeks. On Thursday, the KBW Bank Index (^KBX) fell 9%. Through Monday, the index had gained about 30% since mid-May.
Markets have also seen increasingly troubling data on the spread of COVID-19 infections in a number of states, bringing up investor fears over a “second wave” and highlighting that perhaps this first wave isn’t actually over.
(Excerpt) Read more at finance.yahoo.com ...
No need to complicate it. The market was frothy, having gone up steadily for a month, and big players were draining their glasses a bit, allowing the little players to pay the tab.
Case counts increase usually come with an increase in testing. So case counts aren't a very good indicator.
So putting that aside, all this article offers is the doubling of a very low hospitalization rate, in one state, Texas.
Smart investors are definitely buying today based on yesterdays media induced sell-off.
Exactly. The last few days looked exactly like a market top, with an explosive run up over a couple days. Some “bad news” (still not sure why anything the Fed said was actually bad news for stocks) accelerated what was an inevitable pullback.
The question is whether they got it all out in one day, or if we’ll see some more pullback next week.
Personally, I’m smarting from a stupid move I made trying to catch a falling knife on an oil stock in the morning then getting stopped out in the afternoon. I really need to stick to my day job.
To use another metaphor, yesterday’s crash created a wall of fear that will be perilous to climb, and would make it easy to scare away small investors. I would guess that a continued pullback would be the more likely outcome next week. I’m no prophet, though, and I’d be very pleased for that prediction to be wrong.
Texas recorded its highest number of COVID-19 hospitalizations since the pandemic began.
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Saw an article on this where the press did a “cute” slight of hand on this. It was increased hospitalization overall, due to hospitals now admitting people for surgeries which had been delayed, not specifically COVID-19 hospitalizations increasing.
I don’t trust the “numbers” at all....
Please watch this NYC Nurse’s insider report - it’s long and very disturbing - but worth watching all of it.
All of the buy stops above NQ 10,000 have now been triggered ... mission accomplished.
I would see this as a buying opportunity except I think things are now going to get more chaotic. Biden is leading Trump in the polls, the anarchists are winning, there is going to be a bitter fight for the mail in ballot, and the media is in all out war mode against POTUS. Add to that the uncertain outcome of the election, that may take weeks to resolve.
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