logologologologo
  • Home
  • Business
  • Markets
  • Exchange
  • Investment
  • Personal Finance

Why did the Dow plunge more than 1,000 points? Should I wait for stocks to sink lower? Here’s what some pros think.

What a difference a day makes.

Fresh off the best percentage gain for the Dow Jones Industrial Average DJIA, -3.12% since Nov. 9, 2020, the blue-chip index got clobbered, along with the rest of the stock market, including the S&P 500 SPX, -3.56% and the Nasdaq Composite COMP, -4.99%.

Not even U.S. Treasurys were safe, with the 10-year Treasury note TMUBMUSD10Y, 3.070% climbing above 3% as prices fall.

Some experts attributed Wednesday’s rally to a statement by Federal Reserve Chairman Jerome Powell that a 75-basis-point increase wasn’t being actively considered by policy makers at the central bank at coming meetings.

The remark came after the Fed on Wednesday delivered the first half-percentage-point interest-rate hike, as had been widely expected, since 2000, in the final months of President Bill Clinton’s second term.

The Fed has been hiking rates to combat a surge in inflation that materialized in the aftermath of the COVID-19 shutdowns and dislocations, and which has been exacerbated by bloody conflict in Ukraine following Russia’s invasion in late February.

Some industry watchers peg Thursday’s selloff partly to fears that inflation will continue to dog the economy in the U.S. and elsewhere in the world.

Data on Thursday showed that the productivity of American workers and businesses sank at an 7.5% annual pace in the first quarter, marking the biggest drop since 1947, amid supply shortages and production bottlenecks.

“It was a setback for our Roaring 2020s scenario of a technology-led productivity growth boom offsetting the chronic shortage of labor,” according to Yardeni Research, a provider of global investment strategy founded by Ed Yardeni, a MarketWatch contributor.

Meanwhile, Greg Bassuk, CEO at AXS Investments in New York, said the day’s action reflects “a continuation of 2022’s market roller coaster of high volatility, with this session’s strong spiral downward erasing yesterday’s gains.”

Bassuk told MarketWatch that “investors are selling today on renewed concerns regarding the plethora of continued uncertainties.”

The AXS CEO pointed to tensions with China, Russia’s siege in Ukraine, as well as a mixed bag of corporate earnings and nagging concerns about COVID-19 hamstringing a more powerful recovery in parts of the world.

Recession fears and inflation worries have been the centerpiece of the current bout of bearishness on Wall Street. “There’s no doubt that inflation, rising rates and volatility will continue to characterize the market environment in [the second quarter] and beyond,” Bassuk said.

“What is really interesting about these markets is that there are these every-other-day changes in either direction where investors are outrageously bullish, or outrageously bearish the next day,” said Sylvia Jablonski, chief executive and chief investment officer at Defiance ETFs in New York.

Indeed, MarketWatch’s Bill Watts wrote that, with the exception of 2020, the S&P 500 has already topped or is on track to exceed annual totals of 2%-or-greater moves for every year stretching back to 2011.

Jablonski said there was still room for hope.

“Inflation may have peaked, growth may be slowing, but it is still positive. The consumer is still spending, [and] employment is at all-time highs,” she said, going on to point to the up to $2 trillion in excess savings said to have been amassed during the pandemic.

The volatile state of the market is stoking confusion about the outlook. Is this time to jump into stocks, or should investors wait for a better entry point? Or should we heed billionaire investor Paul Tudor Jones’s advice and stay clear of traditional markets altogether?

History suggests that you can’t time the market and that, over a long period, the market wins. The big question is what’s your time frame what’s your tolerance for pain?

The slump in bonds, with yields rising as prices fall, is complicating matters for some investors. Treasurys, notably the benchmark 10-year U.S. government bond TMUBMUSD10Y, 3.070%, traditionally are seen as a refuge in times of uncertainty, but they also have been undone given the Fed’s current rate-hike plan, which has led to selling in bonds in the hope of richer yields to come.

Related posts

February 3, 2023

Where Will AMD Stock Be In 1 Year?


Read more

Categories

  • Business
  • Content
  • Exchange
  • Inflation
  • Investment
  • Markets
  • Personal Finance
  • Technology
  • Uncategorized

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021

Recent Posts

  • Where Will AMD Stock Be In 1 Year?
  • Here’s how — and where — Netflix has started cracking down on password sharing
  • 2 reasons Meta stock is exploding 20% after a whopper earnings miss
  • Apple earnings: What to expect from the iPhone maker
  • Bitcoin closes out best January since 2013

About Us

The Alpha Cut a Vida Street LLC Company
1404 N. Ronald Reagan Blvd.
Suite 1120
Longwood, FL 32750

Link

(843) 256-4375
https://thealphacut.com

Why Us

Terms & Privacy
Policy & Procedure
Disclaimer

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only.
Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
All data in this communication is provided for informational purposes only and is not intended for trading or investing purposes. We expressly disclaim the accuracy, adequacy, or completeness of any data and content provided by financial exchanges, individual issuers, their respective affiliates and business partners and shall not be liable for any errors, omissions or other defects in, delays or interruptions in such data, or for any actions taken in reliance thereon. You agree not to copy, modify, reformat, download, store, reproduce, reprocess, transmit or redistribute any data or information found herein or use any such data or information in a commercial enterprise without obtaining our prior written consent.
We make no express or implied warranties or representations and shall have no liability whatsoever with respect to any data contained herein. The data may not be further redistributed or used to create indices or other financial products. This report and the views expressed herein are subject to change at any time based upon market or other conditions (such as domestic and global economic trends) and are current as of the date of publication hereof. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
We emphasize that Investment in the securities of smaller companies can involve greater risk than is generally associated with investment in larger, more established companies, and can result in significant capital losses that may have a detrimental effect on the value of your investments.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth.As with any structuring of a portfolio of investments, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general, impersonal information only and are not intended to provide specific advice or recommendations for any individual entity.

copyright © Alpha Cut 2021. All Right Reserved
The Alpha Cut a Vida Street LLC Company