Stock market is freaking out - something is going on

Discussion in 'The War Room' started by dragonsfly, Feb 5, 2018.

  1. dragonsfly

    dragonsfly '''''''''''''''''''''''''''''''''''''''''

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    More market turbulence: Dow drops sharply before bouncing
    by Matt Egan @MattEganCNN

    The ride on Wall Street keeps getting bumpier.
    The Dow slumped as much as 355 points just after the opening bell Monday -- then raced back almost to break-even. The Nasdaq slumped more than 1% but quickly turned positive.


    The back-and-forth action is an extension of the volatility that emerged last week because investors are worried about bond market turmoil.

    After the market started 2018 with a bang, last week was the worst on Wall Street in two years. The selling gathered steam on Friday when the Dow plunged 666 points, or 2.5%, its worst day since the Brexit mayhem of June 2016. Nearly $1 trillion of market value was erased from the S&P 500 last week.

    "You had a market that was overbought and ripe for something to undermine its tranquility," said Mark Luschini, chief investment strategist at Janney Capital.

    The nervousness spread to overseas markets on Monday. Major indexes fell 1% in Hong Kong, 1.5% in the U.K. and 2.5% in Japan.

    CNNMoney's Fear & Greed Index is now flashing "fear," underlining a major shift in market sentiment from a week ago when it was sitting in "extreme greed." The VIX volatility index jumped 7% on Monday after spiking 50% last week.

    Related: Good news for Main Street is freaking out Wall Street

    Investors' main concern is the selloff in the bond market. The 10-year Treasury yield, which moves opposite price, spiked to a four-year high of 2.85% on Friday. It's a dramatic swing from 2.4% at the start of 2018. Higher yields could make normally boring bonds look more attractive when compared with risky stocks.

    The U.S. economy looks very healthy right now. Friday's jobs report showed that wages grew at the fastest pace since 2009. That's a welcome shift by workers who have been dealing with anemic raises for years.

    However, Wall Street is starting to get worried that the "goldilocks" environment of slow growth and mysteriously low inflation may be ending. Stronger inflation would force the Federal Reserve to raise rates more aggressively than investors may be comfortable with. And more robust wage gains could eat into record-high corporate profits.

    No matter the cause, the stock market was long overdue to take a breather. Before Friday, the S&P 500 had gone the longest stretch ever without a 3% pullback. Now the S&P 500's record-long period without a 5% retreat is in jeopardy.

    Related: This is why the Dow is plunging

    While they can be scary, market pullbacks prevent stocks from overheating and give investors who were stuck on the sideline a chance to get in. Janet Yellen, who just stepped down as Fed chief, told PBS on Friday that she still believes "asset valuations generally are elevated."

    Despite the recent turmoil, the Dow remains up almost 40% since President Trump's election. The robust performance has been driven by strong corporate profits, healthy economic growth and excitement about the Republican tax cut for businesses.

    Analysts at Bespoke Investment Group urged calm.

    "Take a deep breath," the firm wrote in a research note on Friday. "For those investors that may have forgotten, this is what a market decline feels like."

    The question is whether the market retreat deepens or whether investors buy at the dip, a mentality that has supported stocks for months.

    "The fundamentals of the economy remain quite strong," said Janney's Luchini. "It's hard to make the case for why we should be down more than 10% -- unless we encounter negative economic news."

    Wells Fargo suffered some of the worst of the selling on Monday. The No. 2 U.S. bank plunged 9% after unprecedented sanctions were handed down by the Fed late Friday.

    Source: http://money.cnn.com/2018/02/05/investing/stock-market-today-dow-jones/index.html

    ---------------------------------------------------------------------------------------------------------------------------

    This has also made me nervous. I hope not it will be the morning that I wake up and only to see my girlfriend inform me that the monetary system has crashed..

    My Reaction:

    [​IMG]

    My Money my Babies!!! Time to buy gold
     
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  2. FacePunch

    FacePunch Banned Banned

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    Because it's all a bunch of bullshit.
     
  3. bobgeese

    bobgeese Silver Belt

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    Shit, if it crashes I’ll be right there to throw in my shekels, just like last time.
     
  4. 44nutman

    44nutman Red Belt

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    Time to buy Beans and Ammo
     
  5. LogicalInsanity

    LogicalInsanity Gold Belt

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    I'm gonna stock up on cliff bars and bottled water.
     
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  6. IloveTHIS

    IloveTHIS Silver Belt

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    I wish I didn't read this
     
  7. Rational Poster

    Rational Poster Scourge of the War Room

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    Thanks Trump!
     
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  8. 21 Savage

    21 Savage Banned Banned

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    this is it
     
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  9. PoundMeToo

    PoundMeToo Gold Belt

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    Seems like a pretty normal correction after huge gains for months.
     
  10. sniper

    sniper Red Belt

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    Im a hobo so this doesnt affect me in the slightest

    Thoughts and prayers for all the big time wall street investor sherdoggers
     
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  11. Clear Winner

    Clear Winner Big Poppa Pars

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    I'm ready.......

    [​IMG]
     
  12. Clear Winner

    Clear Winner Big Poppa Pars

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    Wait, just read the whole OP. OK,,,, NOW I'm ready

    [​IMG]
     
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  13. Rebound59

    Rebound59 金繕い belt

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    Already winning by deregulation and tax cuts, I see.
     
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  14. Satsui Ryu

    Satsui Ryu Brown Belt

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    Only a matter if time, but this timing sucks for me. If this happened in about a year and a half it would not be an issue for me.
     
  15. IloveTHIS

    IloveTHIS Silver Belt

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    What's in a year and a half?

    I have a significant amount in a wells Fargo portfolio. I'm going crazy wondering how much I just got fucked
     
  16. Higus

    Higus Silver Belt

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    That's been what I've been reading, which makes sense, but here's something I find really troubling...

    One analysis I saw (can't find it now, but I'll link it if I find it later) said that news of raising wages was causing investors to pull out of the market. I've heard similar things happening with other companies that announce raises to their employee wages, where investors become angry that the profits aren't going to their dividends and they sell off stock as a response. This has some very troubling class warfare-esque implications.
     
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  17. Falsedawn

    Falsedawn destroy Platinum Member

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    I'm all stocked up on titties and beer, so bring it stock market!
     
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  18. uncommon

    uncommon Brown Belt

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    The only crash thats going to happen is the average joe being to poor to benefit from the gains of the market.

    the biggest companies have access to capital that allows them to purchase whatever technology they need to outcompete the average joe (automation)

    if people try to get smart and go on strike they are more likely to be replaced by a robot and go to jail for not paying their bills than getting a better standing in the workplace.

    if a specific company in the stock index becomes obsolete the indexes reconfigure to a new company (survivorship bias)

    (dow jones holds few if any of the original companies it started with.)

    so overall the richest companies are going to get richer.
    (Pareto distribution)
     
  19. Edison Carasio

    Edison Carasio Excellence of execution belt Platinum Member

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    Wait the stocks falling . . . Like things that fall might trickle . . . And stocks create wealth . . . Soooo the wealth is trickling down!

    MAGA LIBZ BTFO AGAIN
     
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  20. IloveTHIS

    IloveTHIS Silver Belt

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    You sound like someone that knows what they are talking about. I have my life savings in a wells Fargo portfolio. I don't follow any of this shit, that's what I have a financial advisor for. Should I be worried at all? If it's down 10% on the next report that will be a massive amount of money for me
     

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