Stock Market:: S&P 500 has worst day in 6 years
Dow Slides 500 Points as Market Losses Accelerate
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2:15 p.m. It’s ugly out there.
The S&P 500 has dropped 1.8% to 2827.57, while the Dow Jones Industrial Average has fallen 490.85 points, or 1.9%, to 25,939.72. The Nasdaq Composite has tumbled 2.3% to 7558.89. The Dow briefly was down more than 500 points.
Why?
Major factors: Trade wars (especially with China) starting to hurt some sectors of the economy but expected to get much worse. And Fed's raising interest rates, plus hawkish comments from the Fed (even more increases in interest rates are on the way).
Exactly.
I had recently come across someone I hadn't seen for a while (actually it was over 15 years!). The guy is a brilliant market forcaster-- but not known by most people-- known mainly to people in power...
We had a long talk, and one of the main points he made was, basically, the danger of the trade wars (especially with China) will be much, much worse than many people know. Bad for China of course, but also bad for the U.S. (Worse for China because their economy is much weaker than ours). Also bad for the entire globe.
The main factor, IMO, is how long they will last. If China caves soon and agrees to a trade deal, the damage will limited. However, for various technical reason, he feels China probably won't give in soon-- and it may continue a long time.
Ford takes Billion dollar hit to bottom line from tariffs
planning large white collar layoffs. Cancels importing new SUV made in China.
GM has said the same $1,000,000,000
POOF! GONE!
It's all about rates.
Fixed investments look more attractive and safer, so money rolls out of equities.
I wonder how long it will be before trump blames this on the dems or Hillary. [eye roll]
You almost nailed it...he tried to blame the Fed.
What scares me is he doesn't play the market and blurted out the same thing Bush did. "It's just an adjustment"
Bush said it and then the walls caved in.
Sometimes, it is an adjustment. To determine if it is just an adjustment or not, you have to see how long a correction lasts. If it is just a single day, or even a week, then it can be considered just an adjustment. However, if there is an impact beyond just the stockmarket, ala the AIG bundling of bad mortgages into multiple Credit Default Swaps, which exacerbated the problem of the 2008 recession, then you have a wider problem than just a market correction.
.Exactly!
Don't a long period of the market rising continually (such as we've had) a correction is inevitable. In fact the pros like corrections-- it gives them an opportunity to buy stocks "on sale"!
Of course the trick is to know whether its just a short correction that will soon followed by the market continuing to go up-- or if its the beginning of a long dangerous pullback. (For novices, when the market was actually doing what it did for two days-- its hard not to panic).
But even the pros are wrong sometimes.
And there things you can do to minimize losses knowing that there will eventually be some negative surprises. One key thing is to diversify your holdings in general.
And specifically-- buy some stocks that don't trade in sync. For example own some that tend to go down when interest rates rise, and others that tend to go up when rates rise.
Also, the big key to getting rich off the stock market is to buy and hold long term. Buy stocks that from a company that will have products that will be in demand for a long time. If I had $3000 in the fall of 1990 and bought 3M stock, I would be doing great right now financially due to it having split several times in that time period along with going up from around $19 a share to $198 a share.
Yes, sometimes it is. I've played long enough to see things from different angles. And yes, I have been wrong.
But...I'm troubled by a few things and backed away to cash a while back.
Retail is taking a kick in the pants and after this holiday season expect to see major closings.
Unemployment claims climbed slightly recently.
Companies are starting to take a defensive posture. Some are buying back stock, some are looking to efficiency which means jobs will be affected.
Politically, Trump is going to have to follow through with collecting the tariff tax from us because the income tax overhaul is failing to bring the returns and revisiting the issue would mean an admission which would not be likely.
I'm sort of in agreement with Ron Paul a major catastrophy is coming and the levers have all been pulled. We're going to be spread out way to thin.
Actually 3M has only split twice since 1990 and only 4 times since 1972.
Twice I had to hang on to 3M because it nosedived horribly.
I like 3M, they do great research and the engineers have a great 50/50 deal. 50% of the time you are working on 3M mandated projects, the other 50% the engineers can follow whatever curious fancy they desire.
3M is in the middle of changing their portfolio of holdings, the last time they did that they went off on an industrial technical binge.
I can see them spinning off their abrasives line soon as the market is catching up with them and getting diluted.
That used to be true in the past. Buy the "Blue Chips" (major American companies that were always quite solid) and never sell them.
But IMO lately its gotten more complicated.
For example, years ago IBM and GE were considered some of the best U.S. companies. Low risk, paid a dividend etc-- seemed like you couldn't go wrong buying and holding over years...even decades. They both have done really poorly.
I like now its sort of like "trust but verify"-- find relatively solid low risk companies and plan to hold them for a long, long time. But-- also keep an eye on them.
The change seems to be because there's so much tech. Technology changes fairly rapidly. So some sub-sectors of tech that had looked like fool-proof investments suddenly plummeted if the technology was becoming obsolete-- or if they tried to develop hot new products but failed.
I don't follow the autos much any more-- but there was a time when it looked like you couldn't go wrong buying sand holding stocks like GM and Ford. I just took a quick look at a long term chart of Ford. It kept going up for a while. It looks like on or about Dec. 1st 1998 it sold for about $33/share.You wouldn't have done so well if you bought and held this former "Blue Chip"-- last Friday it closed at $8.64!
Traditionally its the Republicans (and I think especially the more conservative ones, have wanted a balanced budget. In fact many seemed to obsess about it. But is Trump is greatly increasing spending and increasing the deficit. Where's the to remedy that going to come from? Under Trump taxes can't be raised.
And the tariffs will cut into most corporate profits-- so the government won't get much more money from them through taxing corporate profits because most corporate profits are declining due to tariffs.
And if he's able to build one of his major projects ("The Wall") that will cost a small fortune. He wants increased military spending which of course will also increase the deficit.
And then there's his cock-a-mamie idea of creating a fifth branch of the military-- a "Space Force". Creating a whole new and expensive bureaucracy! (WTF is he expecting? An invasion from Mars-- perhaps he also thinks it will be lead by Hillary or Obama, or Schumer or Pelosi-- LOL!)
I just looked at a chart of AMZN. If you had bought shares on Jun 1st of 1997 (Looks like it was about $1.50/share!) and finally sold it even its very lowest price during the recent horrendous 2 day pullback (when a share was selling at the low, low pullback price of only $1700/share (well, I rounded it off-- it was actually cheaper than that, a single share went for only $1690) . . . you would've done OK. (And at a dollar and a half, I imagine many folks who got in early could've afforded a few hundred shares-- or more).
I haven't paid much attention to the stock market, particularly after I sold all my stock. Those two splits, I know one was a 2-for-1 split, depending on the amount would still give me over 10 times the amount of the purchase price. If you look at the numbers, I used earlier, they didn't account for stock splits. You pay $19.00 per share in 1990, the stock splits once 2-for-1, you now have double the shares that you originally purchased, then you sell all your shares for $198 on Friday. For every share you originally purchased, you made $396, that's almost 21 times the amount you originally purchased. By my calculations, with $3000 in 1990, I would have been able to purchase 157 shares and if I sold them this past Friday, it would have netted $62,172.
That's why my caveat was about a product that would sell for a long time. With everything that is changing, particularly in the Tech sector, you need to research the companies you invest in and find out what they produce or what services you provide and try to find out which products or services will be available long term. Apple was a company back in the late 1970s and 1980s that looked like it was going to die a horrible death due to their foolish decision to make everything proprietary and if someone opened up a computer to fiddle with it, voided the warranty. It was that foolishness that caused IBM and Microsoft to surge ahead in the early days of the Tech wars. Then, Apple created the iPod. That single device saved Apple as they were barely subsisting on computer sales to schools. Since then, they have hit home runs with just about every single device they have created in recent years from the iPad to the iPhone.
Not really. When stocks split, so does their price.
You have shares at $19 and they split 2:1 you now have 2 shares at about $10. The advantage is now you hold a while until they settle back up to $19 each.
We went through years and years of splits, div. reinvestment, outright purchasing, and company gifts to accumulate 28,000 shares of common stock and about 100 shares of preferred stock.
That was my wife's employer. 3M was a see-saw ride sometimes. I watched that stock go from $94 and nosedive in to the 30's. A little too wild for me, but that's tecnology. It usually happens when a patent runs out. Post-it notes had that effect. So did (ready for this?) Ddisposable diaper tape. 3M invented the tape for disposable diapers, it's a tough process because it comes in contact with babies. When that patent ran out big mfr.s like Kimberly-Clark could buy the tape cheaper from 100 sources...
And, you seem to ignore everything I said about 3M stick. Did I say I would have sold the stock at the split? I said it split and therefore I would have had double the stock compared to when I would have bought it. And, by holding long term, that split actually would have caused me to make more money NOW due to having double the shares. That seems to be your disconnect and misunderstanding of the stock market. If you hold long term and make sure you pay attention to the actual products that the company has, you can do really well. You talk about the roller coaster, with day-trading, every day is a roller coaster for ALL stocks.
Well, firstly I don't day trade.
And I never said when you would buy/sell.
And you're correct. There's probably a lot I don't know about stocks, we only started in them in 1990, two years after our first incorporation.
I did relate my history with 3M with the accurate amount and times of their splits mind you. My roller coaster ride was during a 5 year buy and hold.
So, who's ignoring the details?
I am not worried.
This pull back is due in part as the result of the yearly (October) selling activity of the large hedge funds related to annual owner redemptions activities. Also due to rising treasury rates, money is leaving the equity markets and going into the corp bond markets. New money both domestic and foreign will come back into the stock markets to buy depressed stock prices.
I just bought some depressed stock and they are tanking, lol.
now I am depressed as well, smh.
Actually I am back to where I was at the top of the melt up in January...
Mutual fund just reported, added another $1,100 to my losses.
Sure hope Ender is wrong about the nosedive...
I do too.
I have read doom and gloom articles and articles that just call it a blip in the radar.
In my opinion the stock market is artificially inflated.
Global corporations can withstand more of a hit than the average small time investor. If a crash occurred, it will be people that lose retirement funds and life savings. To protect their own bottom line corporations/business will lay off. Then consumer spending will cease. With the US debt at unsustainable levels, the economy will take a nosedive.
Only the ones who haven't bother to save for the future-- and also some who have saved but who haven't invested wisely.
(One group of people that this includes is people who invest based upon their emotions-- strong emotions caused by their political views. Instead of showing some emotional self control and invest based upon them committing to pursue the actual facts. Regardless of whether or not what they discover supports their political biases or not!!!!!!)
As I said above, the real key to getting rich from the stock market is to buy and hold long term. I gave an example of a stock that would have possibly made me rich if I actually had $3000 in 1990 to use to purchase stock. The market is volatile with day-trading and various large funds trying to maximize instant returns. The problem for me is that I probably would have had to sell them as I had to sell my stock in Coke and Hershey (that I had purchased when WorldCom was around) due to my health issues. WorldCom burned me, because I didn't listen to my instincts and instead went with the recommendation of a broker...
I agree.
Most people don't take care of it themselves though. Like with a 401k I had with a company I worked for several years ago, a firm took all of our money and invested it themselves. The only choice we had was whether we wanted to be in a more high risk pool or lower risk bonds and such.
Global corporations can withstand more of a hit than the average small time investor
I'm wondering if that's also true of Global corporations that have large investments in China?
I think they will fair better than a lot of company's that don't have investments in China, I think China has found a "key" to success in the global market and, are taking advantage of it.
Well, you might be right. However at this point I think the U.S.-China trade war is hurting both countries-- and now may be hurting China even more than the U,S. (?)
Maybe but, wasn't there a story recently about China buying up or, getting control of ports in other country's, if this is true then, wouldn't they control more major shipping of goods and, receive moneys in that sector as well? Seems a great way to weather tariff's at home.
If you have money to throw away like that it seems like you can weather a tariff storm. We can't even take care of the infrastructure we have already.
I'm not saying that China has a great business model or, that they are the way to go but, there may come a time, if we don't catch on, when China will be the only way to go because, they will control most of the global business's.
The Emperors treasures from 10 thousand years of imperial rule.
If you think Trump is actually doing something about it, then I have a bridge you would love to own.
No, no, no and, no.
LOL
A buck two ninety-eight.
I would say that we do the same.
I just heard an hour of that on PBS. China is going crazy loaning money or outright buying transportation and ports in Africa and South America.
Shit! They control the Panama Canal now! They built a transportation network in Nigeria and everyone thought it would bring big jobs...nope.
The Chinese built it with Chinese labor amd operate it with Chinese labor and management.
Yep, total control by the Chinese.
The primary purpose of a tariff is to suppress demand for foreign products. It's not about the amount of tax. It's about the falling sales the tax creates.
The Chinese are already paying people to do shit they don't need done, just so they can provide jobs. If you add 30 million factory workers to that number because US sales have fallen, it becomes financially unworkable pretty quickly.
Nobody, including Trump, things tariffs are a long term solution. They are a negotiating tactic to force other countries to agree to fairer trade arrangements.
Someone once said you can't fight a war on two fronts, Trump created a tariff war with the world, ok, so, Trump thinks that fighting a war on hundreds of fronts is a winner, as do you. The country's that have U.S. tariffs on their products will trade with each other without putting tariffs on those country's products and, make money and, they will either not trade with the U.S. or, put tariffs on our products going to their country, either way, that is bad for the consumers in the U.S. and, costs U.S. jobs.
You haven't a clue what I think. Don't guess.
Yes. To the extent that those other countries have markets for each others products. But pretending that losing sales in the US won't bother them is idiotic.
Some nominal amount, yes.
Temporarily, maybe. But on a longer term view..... admittedly against all expectation.... Trump seems to be having success re-negotiating trade deals in a way more favorable to the US.
How so? Besides minor altercations, the deal he made with Mexico and Canada are virtually the same.
Plus we have not seen all the specifics. So to say it is better, is stretching it a bit.
Edit: Forcing companies in Mexico to raise their wages, will only raise the price of vehicles. Guess who pays that?
It will require 75 percent of auto components to be built in North America, up from 62.5 percent.
Forty to 45 percent of auto components will have to be made by laborers making at least $16 an hour. The average wage in a Mexican auto factory is less than $8, including benefits.
U.S. farmers are getting more access to Canadian dairy markets.
70% of the steel used in vehicles sold in North American must come from North America.
It's better than we had.
The same people who would pay higher prices for $15/hr minimum wage, or who pay higher prices every time an American labor union negotiates higher wages for its members.
I find the "prices will go up" line of thinking to be astonishingly, brainlessly hypocritical. The same people who gladly proclaim they would happily pay higher prices to support a Democrat/liberal program like a massive minimum wage increase suddenly object to doing so because "Trump".
62 to 75. OMG. Drop the presses! Big whoop. Will not make any difference.
It is not hypocritical when it has an impact on wages in this country. I think it is kind of ironic that the America first crowd are cheering other countries making higher wages. That is what is hypocritical.
The steel tariffs are still in place.
What is brainless is touting this as a major success.
If it was some great thing, they would be shouting about it non stop. Do you see any republicans, or trump for that matter, using this as a talking point for the elections? I sure don't.
It's a half trillion dollar industry. 13 percent is not a small amount of money.
The new agreement more than doubles labor costs for companies moving auto production to Mexico.
And? It's still going to mean more steel production from US sources as opposed to Chinese or Indian sources.
You're the only one arguing that point. I simply said it's better than what we had. Which it is.
Why does something have to be "some great thing"? Why can't it just be "better"?
Definitely.
If what you say is true, its only a minor factor. The China economy is hurting for many reasons. For starters there's a tremendous of corruption. And Communist ideologues just aren't good ar understanding how capitalism works. And given a choice between what works and what support their (Communist) agenda-- they have to follow the political party line!
Actually the trade war is very bad for the U.S. as China-- but its really only just started. it will get much worse. I think Trump's looks at it as the U.S. will win-- and China will lose. But what he doesn't realize is that if China "loses" big-- it will hurt the entire world economy-- including the U.S.
This reminds me of what happened just before the "Great Depression" in a few ways, country's wanted to "show" Germany up but, they ended up hurting themselves doing it, that included the U.S.
That's an easy question to answer. They will sell U.S. Treasuries-- they own a YUGE amount of U.S. debt. (I haven't kept up with this, but I wouldn't be surprised if they are already starting to do it).
1. Cramer. Should have his shoelaces tied together and be thrown onto I-90 during rush hour.
2. The market's meteoric rise makes as much sense as it's meteoric falls. Based on what? Why? And who benefits from all of this, really?
3. The real shame is the fact that 'Main Street' is played like a puppet on a string by Wall Street.
People who are smarter than the average person....
(To some degree that means wealthy people who've made their own money not inherited it or won the lottery-- often that's why they're wealthy). But also people of average means who are frugal-- who save money regularly-- and then do the work to learn how to invest successfully).
I voted you up on principal.
Except 'these markets for the past couple of decades' are most definitely not my grandfather's or father's markets.
There's an old saying:
There's nothing constant except change.
There's been a widespread trend in recent years-- there's been a noticeable increase in the number of people who refuse to take responsibility for their lives. They blame all their failings on someone else! The market's meteoric rise makes as much sense as it's meteoric falls.
Correct!
Based on what?
Basically its based upon supply and demand-- as well as peoples refusing to take responsibility for themselves-- they are mostly fools and blindly follow trends (the latest fad). Many people make a decision based on something they heard or read online. Making a financial decision based on one article or online comment someone made? I PITY THE FOOLS!
Of course it makes no sense-- to people who don't understand and are unwilling to do so!
The way subatomic particle operate also makes no sense. To people who don't understand it and haven't bothered to find out. Of course it makes perfect sense to informed physicists..
Why?
Because it based on the aggregate of peoples' opinions. Most people are too lazy to learn the facts....
And who benefits from all of this, really?
People who take the time and put in the effort to understand how the market works. (Most individuals refuse to do this-- they'd rather spend their time whining about how unfair life is).
3. The real shame is the fact that 'Main Street' is played like a puppet on a string by Wall Street.
To some degree-- for gullible people or those to lazy to find out how to avoid being constantly manipulated others. And that's true not only in the Stock market. But its more like the smart people on Wall Street put in the time and effort to do the necessary research. "Main Street'" for the most part refuses to take responsibility for their lives-- they'd rather whine-- and look for someone to blame.
And just as stupid is letting one's political agenda govern their action in the market. Trading based on your emotions (caused by being influenced by ones political bias) is an excellent way to trade-- if your goal is to lose a lot of money quickly!
You can't be "Played' by anyone-- if you're willing to do what it takes to win.
For anyone who still doesn't understand how it works, perhaps this poem will be of some help:
Miniver Cheevy
The vast majority of Americans survive on $40k or less. Just what it is.
And another really serious problem-- its amazing how little most Americans have saved for retirement. (Even people who are not well off but who could save more than they do).
Don’t miss out on the buying opportunity.
I couldn't access-- its protected by a paywall (I've used up my quota of free articles for the month).
Not to be a stickler, but the market actually dropped just over 800 points, not 500.
Go ahead-- be a stickler! Its good to be accurate
And also remember the recent downturn ended today-- the market closed up.
Which may or may not happen again next week.
(Both types of moves really don't say all that much about the future. Well-- except that we are probably in for more volatility then we've experienced in the recent past).
"Dow Slides 500 Points as Market Losses Accelerate"
oh Noooooooooo………..
I lost 500 points of the 18,000 points I already gained.
I'm jumping of the highest bridge I can find, right now !
Like most people my portfolio went down for two days.
Of course that's only a "Paper Loss"-- a loss on on paper (now-a-days more likely to be on a computer screen). Because you don't lose or gain money on a stock, no matter how much it moves-- until you actually sell it*.
I've been trading for a long time. I was happy to see I'm getting better at it. Every day I check the total value of my holdings against a "benchmark". I compare my %age gain or loss against the S & P (or usually against the NASDAQ for tech stocks). Then everyday I try to see what I can learn from what happened-- and how I can do it better in the future.
When the market plummeted on Weds & Thurs-- the average value of my stocks also went down. But I was surprised to see how little they went down compared to the bulk of the market. Compared to the averages.
No coincidence-- I've spent years trying to learn how to construct a portfolio that when the market has a big plunge, my portfolio dips considerably less!
The main way I do this is by smarter and smarter hedging-- for example, I have stocks that tend to go down when interest rates rise, and others that tend to go up when interest rates rise.
(Another way to protect yourself is by smart use of options. I used to do that but it takes me a lot of time to do that, and I am trying to spend less time on the market).
P.S: My Amazon stock went down a lot those 2 days-- but it turned out it was still up considerably from when I bought it. (At one point i tmore than doubled in price-- one of only three stocks that I've had that did that well...since the Tech Bubble where I had many Yuge gains..and more Yuge losses-- IIRC that was over 15 years ago).
___________________________________
(*Some exceptions-- if you trade various types of options and don't do it wisely, or if you are really really in debt by overuse of margins).
Let me get your landing pad....
How is he supposed to land there? There are two huge holes in it. He might fall right through!
I make bunches of money off those little CMU's.
I am not recommending buying or selling this one-- but it might interesting to watch.
Horizon Technology Finance Corporation (HRZN)
Forward P/E 9.9
Forward annual dividend yield 10.45%
Dividends paid monthly (Not quarterly as with many stocks)
Of course anything paying that high a dividend should immediately be suspect-- especially in the current (risky!) market. Anyone interested in the stock should obviously do thorough research-- or consult a few excellent financial advisors (if you know any).
And if you do buy some-- don't do it all at once-- start by buying a small amount...