Stock Market Rout Spreads Investors' Fear

[louis c]

This discussion thread was locked as off-topic by muriel_volestrangler (a host of the Latest Breaking News forum).

Source: Wall Street Journal



Feb. 4, 2018 7:00 a.m. ET

U.S. stocks last week suffered their largest weekly drop in two years. But some investors worry that falling prices for things like oil futures, gold and bitcoin are offering a more ominous signal that could presage deeper declines.

The broad selloff that featured Friday’s 666-point tumble in the Dow Industrials marked a sharp reversal from the broad-based advance of the past year. Many stock-market indexes have hit fresh records or recent highs. The Dow is still up 27% over the past year, while emerging-market currencies, high-yield bond prices and commodities like copper and gold have likewise risen.

Signs that global growth is picking up while interest rates remain below historical norms has helped propel a broad gains in so-called risky assets. That widespread rally resulted in the average correlation between oil, stocks, bond yields and the euro reaching its highest level in 5½ years, a Deutsche Bank analysis showed.

Even before Friday’s stock rout, many global investors had grown uneasy about various assets moving in lockstep—especially because trading in many of these markets isn’t typically tied to share prices. Such closely correlated movements are often associated with turning


Read more: https://www.wsj.com/articles/as-stock-market-rout-spreads-investors-fear-markets-falling-in-lockstep-1517745600

[TeamPooka]

1. when stocks go down gold and oil usually go up. Nothing is normal anymore. It could be time to worry

[global1]

2. This Surely Has Nothing To Do With Trump & The Upcoming....

constitutional crisis. (sarcasm)

[DonCoquixote]

3. schadenfruede

After all, people love Trump when the artificial sweeteners of financial tricks favor them...NOW, let's see what happens.

[beachbum bob]

4. I would add that the instability of the trump administration right now is magnifying market

insecurity as we see the VIX is shooting up, 28% in one day alone last week. The fact that psychology plays a role in market rise and drops can not be ignored. We moved most our funds months ago into safehaven investments.

we could see some huge impacts if and when indictments start flying from Mueller's grand jury

[knightmaar]

5. But some investors worry ... bitcoin

No real investor bases any argument on what bitcoin is doing. That's just stupid.

[bucolic_frolic]

6. Our worldwide hegemony is shaky for the first time in decades

and it's not one event, like 9-11 or oil scarcity. It's systemic. Everything is firing on all cylinders and there's no upside from here. Think .... 1999, 1977, or 1965 with financial deleveraging, stagflation, resource constraints. Focus on cash flows. Income streams, and asset payouts. Price appreciation other than commodities - which is not a sure thing if contraction occurs - is not to be counted upon. Hard to find an edge in very much because with real-time information, everybody already knows as much as you do.

[CrispyQ]

9. Add in climate change & it is nothing like previous times.

We're on an unsustainable course. Humanity's about to get smacked down a few pegs. I drew a winning lotto ticket when I landed in mid-20th century USA for my birth place & time.

[DBoon]

7. "broad gains in so-called risky assets"

That's called a "bubble", isn't it?

[Rebl2]

8. For the last few months all I can think

of regarding the stock market is the line by Greenspan-irrational exuberance.

[ffr]

10. It narrowly missed beating out the 9 year weekly drop from Oct. 10 2008

For those who don't remember or are unaware, in 2007 the markets began to swing violently up and down and we were told then that the fundamentals of the economy were strong. This wasn't based in fact. It was a conservative talking point to instill confidence in a market that was propped up by ponzi schemes.

[not fooled]

11. And remember, dumpsters

your idol takes credit for the highs. Will he also take responsibility for the lows, especially in light of instability-generating actions such as the bubble-inflating tax cuts and financial industry deregulation?

Something tells me that it will then be Obama's fault.

[CountAllVotes]

12. Idol????

[UpInArms]

13. Well, it does seem to be rather cultist

Behavior on the part of the dumpsters

[not fooled]

14. the morans' idol dump

is crowing about the #s now, taking credit for the economy he inherited from Obama.

Once the crash happens--said crash having been precipitated by puke-endorsed actions such as repealing financial industry regulations put in place after the last crash, plus of course the bubble-inflating puke tax scam--he will blame Obama.

And, yeah, as shown by the fact that the russia-dump scandal continues to unfold yet dumpsters continue to keep their fingers in their ears and shout "La-la-la we can't hear you", it is a cult.

[CountAllVotes]

17. Thanks for the explanation

n/t

[lunasun]

30. Many trumpets say he is Gods chosen one . I know wtf to us ,but these people worship shitler

He is a strong warrior almost biblical idol fits imo
http://www.latimes.com/opinion/op-ed/la-oe-aslan-trump-cultists-20171106-story.html

[Nitram]

15. Keep your shirts on, the market was overdue for a correction and this was only 5%.

Most corrections are at least 10%,, so we're probably not finished yet.

[mobeau69]

20. It was a 2.21% decline. n/t

[Nitram]

27. You're right, thanks for the correction.

Further reinforces my point.

[vkkv]

16. It sure would be nice if anyone who posts here would at least copy/paste in full sentences and

concluding paragraphs because I'd bet that not a single one of us click on and open every attached link that is posted here.


Isn't that simply the most BASIC point of even posting here at all? To clearly communicate and/or share valuable info with DU'ers?

[The Mouth]

19. I respectfully disagree

people and organizations that create good content should get the clicks. It's not a lot of effort to go the source, one click...

[vkkv]

21. So you don't mind the incompetence and carelessness.

Yeah, it'd be great if no one cared to do anything properly... ever.


That's what makes America great.

[lunasun]

31. You are not suppose to post more than 4 paragraphs from links per Tos I thought

[vkkv]

25. No, it's not difficult unless the lined source won't let one read it b/c it's a subscription as with

the WSJ.

[louis c]

23. What are you talking about?

We are only allowed to post 4 paragraphs from a linked story.

The link is in the post.

I just don't understand your complaint. could you be more clear?

[vkkv]

24. This sentence::

"" Such closely correlated movements are often associated with turning
"""

turning.. what? where? Your paste just drops off a cliff.

[louis c]

28. Click the link. You'll get the whole strory

[The Mouth]

18. Some people I respect think a 10 percent correction is due

Based on P/E ratios. I agree

Still, dollar-cost averaging into the market over years is quantifiably proven to be the surest method of gaining wealth; if it goes down then my purchase will buy more.Over enough time it always goes up.

[kimbutgar]

33. Yes stock buys backs from Cos not having to pay more taxes now are fueling the market rise

It the pricing earning ratios of all. Also the computerized trading is causing the market to become erratic.

[bronxiteforever]

22. GOP and Trump owns the economy and Stock Market

“Stock market hit yet another record high yesterday. There is great confidence in the moves that my Administration is making.”DJT

https://www.washingtonpost.com/politics/trump-cheers-on-a-stock-market-he-once-called-a-big-fat-ugly-bubble/2017/12/19/811cce82-e4de-11e7-833f-155031558ff4_story.html?utm_term=.d48956ca2a8f

[redstatebluegirl]

26. Did anyone watch the interview with the outgoing Chair of the Fed this morning on Sunday Morning on

CBS.... She was really careful but what she wasn't saying terrified me.

[SWBTATTReg]

29. Market has been going up for quite some time...

Makes sense that it would go down sometimes. As history shows, it does go down.

How much is probably determined in part by how markets and the people (buyers, sellers, you, I, etc.) who drive them react. It's been a long time since people have seen a full-blown rout. This could make things worse.

It is possible that people will overreact and before you know it, you have a full-fledged panic in the works. I know that they have 'stops' that will kick in if markets fall a certain amount (still? I think so, not sure 100% w/ the way tRUMP been dismantling regulations), but I don't think they really work, other than to 'give some breathing room', and I think people would be still in a panic mode.

Some asset classes tend to move in conjunction w/ the markets, and so will follow the markets down too. People also will start to migrate into other assets or cash in an attempt to preserve, but it's probably too late by then to do anything really.

[kimbutgar]

32. Usually foreign buyers buy our treasuries and they are backing off because they see the US as

Unstable under Twitler. I read in Asia Times an article expressing that countries are alarmed by the deranged Twitler.

[muriel_volestrangler]

34. Locking - the hosts feel this is analysis, rather than a breaking news story

The drop was already covered in an LBN thread on Friday: https://www.democraticunderground.com/10141978091

Please either add to that thread, or repost in GD, Editorials or the Economy group. Thanks.