Stocks tumble on US recession fears | Fox Business
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As stocks plunge on recession fears, 'don't panic, don't buy the dip': Jonathan Hoenig
The Capitalist Pig hedge fund manager Jonathan Hoenig advises investors to focus on what's working now in the markets, and it's not Big Tech.
Stocks plunged on Monday as U.S. recession fears caused turmoil throughout the global markets.
The Dow Jones Industrial Average tumbled 1,000 points, while the Nasdaq Composite and S&P 500 also fell by 3.9% and 3.2%, respectively.
A weak jobs report and shrinking manufacturing activity in the world's largest economy, coupled with dismal forecasts from the big technology firms, pushed the Nasdaq 100 and Nasdaq Composite into a correction last week.
"While Friday's employment report was disappointing, it wasn't the only worrisome economic indicator, only the latest," said Greg McBride, Bankrate's chief financial analyst. "Couple economic concerns with the cacophony of earnings disappointments and weak corporate outlooks, global unrest, and currency gyrations, and you have the recipe for sudden volatility."
STOCK SELL-OFF CONTINUES, AS US RECESSION FEARS MOUNT: LIVE UPDATES
Dow Jones Industrial Average
THE JULY JOBS REPORT JUST TRIGGERED A RELIABLE RECESSION INDICATOR
The weak jobs data also triggered what is known as the "Sahm Rule," seen by many as a historically accurate recession indicator.
"The July jobs report is being viewed as a recession warning, and the markets are responding accordingly," said Bill Adams, chief economist at the Dallas-based Comerica Bank.
Traders work on the floor of the New York Stock Exchange during afternoon trading on March 27, 2024, in New York City. (Photo by Michael M. Santiago/Getty Images / Getty Images)
With the jobless rate unexpectedly rising, the so-called Sahm rule is now in play. Named after former Federal Reserve economist Claudia Sahm, the rule has successfully predicted every recession since 1970.
FED HOLDS INTEREST RATES STEADY AT 23-YEAR HIGH, BUT OPENS THE DOOR TO REDUCING RATES
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 38894.74 | -842.52 | -2.12% |
| SP500 | S&P 500 | 5216.9 | -129.66 | -2.43% |
| I:COMP | NASDAQ COMPOSITE INDEX | 16291.934132 | -484.23 | -2.89% |
It stipulates that the economy is in the early stages of a recession when the three-month moving average of the jobless rate is at least a half-percentage point higher than the 12-month low. Over the past three months, the unemployment rate has averaged 4.13%, which is 0.63 percentage points higher than the 3.5% rate recorded in July 2023, crossing that threshold.
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Big Wall Street brokerages also revised their Fed rate projections for 2024 to show greater policy easing by the central bank.
Japanese stocks also fell on Monday, with the Nikkei 225 index closing lower by more than 12% - 4,451.28 points - in its worst day since 1987.
Cryptocurrencies plunged as well, with the price of bitcoin falling 17.5% to $50,239 a coin on Monday morning. The price of ethereum slid 23% to $2,230 apiece.
FOX Business' Megan Henney and Reuters contributed to this report.
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So are we still giving Biden credit for the economy? or are we deflecting to someone else's fault?
Didn't Harris just recently blame Trump for the bad jobs report that came out last week? Why yes she did...
The economy will never be the Democrats fault.
If only Republicans would have gone along with all of Democrats massive spending plans making them even larger- then we could have spent our way out of any recession./S
Nah, Bidenomics is so yeseterday. It's Kamalanomics now....
This may end the Harris honeymoon.
I don’t know if people remember, but I mentioned what I do for work (I’m a trader— stock market). So unlike “some people we know”— when the markets pop up or down, the first thing on my mind is not how I could attempt to use it to bash any group of people. Rather, my first thoughts are “what’s the trade”?
Or trades, plural. So today I am very happy indeed! .
There were a few stocks I’ve been wanting to buy but they’ve been too expensive for a while. So today I happily bought a fairly large amount of one— and much smaller amounts of four others
—Yours truly,
Krishna the “Capitalist Pig Wannabee”
OINK!!!
Glad it might work out for you.
I am the furthest thing from a "trader"- tried it in my 30's and regretted it. I only go for long term investments through annuities and mutual funds. I don't mind the short term dips (which I hope that is what this is). Recessions are a real pain in the ass to my portfolio- and indicators have been for a long while we are heading for recession. I have hedged my position in everything so the I should be relatively "safe". Of course I thought that the last time as well and was dead wrong. I now have more money in precious metals and real estate/land than ever before. Yes, I am the "snuggy" of investors.
First I should say I shouldn’t have said “trading”. People on Wall St use it to mean buying or selling a stock. People not familiar with that usage think it means “day trading” but to people “on the street” (AKA Wall St) it simply means people who do their own buying and selling— even if they are investors.
Actually I do mainly investing— long term buy and hold (with occasional adjustments). On rare occasions I will go for a quick trade buying and hoping to sell for a quick profit.
You mentioned real estate— I am always overweight REITs that pay decent dividends. Recently at the first sign of market weakness added to REITS and a utility (“safety trades”).All paying decent dividends.
Currently no precious metals or Bitcoin. (But since more bitcoin mining & AI require lots of electricity I have exposure to Copper (also sometimes Copper for eventually expected recovery in home builders).
Recently I’ve started trading derivatives— mostly selling covered calls (occasionally selling puts). It took me a while to learn how to do this effectively. (Effective use of covered c
Sorry for the cut off comment. Having computer problems off and on all day & just got a call back I’d been waiting for from tech support.
Anyway what I was saying was that I started selling covered calls. It is time consuming but can be lucrative. Advantages of Covered Calls: 1. Generates income: 2. Greatly reduces risk! Disadvantages: 1. Since it increases income may not be useful depending on your tax situation. 2. Takes a while to learn how to best use them.
In addition to selling covered calls yourself (on individual stocks, if you don’t want to spend the time doing that there are covered call ETFs. Some have very low fees. Some pay very large dividends but those are generally not tax efficient.
I am generally an income investor not so much growth. That means mainly dividend stocks (& covered calls.) For relative safety (plus income) I especially like REITS, recently turned to utilities. Also some of the big drug companies ( stuff like PFE, BMY, etc) have been beaten down excessively to the point where there dividend aren’t bad. (And when I don’t need cash I always DRIP).
Finally much of what I wrote is “stream of consciousness”— free association, random thoughts. Nothing I just typed is meant to be a recommendation to buy or sell any securities, nor do I necessarily own any I named. (Just wanted to have an interesting conversation that’s a break form politics.
Not blaming anyone for the downturn, because short of a catastrophic mistake no 1 person can have huge influence on the market, Just looking to see how hypocritical some can be, and their absence speaks volumes.
I think sometimes one person can have an effect: but not necessarily long lasting . Perhaps Jerome Powell. Netanyahu. The Grand Poobah of Iran (I forget his name). Some kid who assasinates a world leader. Vladimir Putin.
I guess the point I was trying to make is it is no more honest to give Reagan credit for a good economy than it is blame Biden for what’s happening now, I honestly think the Speaker can influence the market through legislation he proposes. Tax cuts, tax increases or huge domestic spending.
Well I basically agree with you. Often people who are politically motivated will attempt to blame— or praise — some elected official for the state of the economy. But there often many factors contributing to that. Some known— and there might be some we aren’t even aware of! (For example some military or political event in an oil producing country in the Middle East that doesn’t make a major headline.
Or a string of unusual weather events that negatively effects some major food crops that has a much bigger effect than we realized.
Of course if Putin suddenly decided to end the Ukraine war or Netanyahu suddenly pulled all troops out of Gaza and agreed to a permanent cease fire that would have a real impact. (I own defense stocks— those types of actions would make them go down. Also Gold stocks would plummet.,Also oil stocks ( and prices at the pump) rise and fall with wars— and with peace).