Stocks Skid on Economic Worries - WSJ ( 07/08/2021 )
By: Joe Wallace (WSJ)
S E E D E D C O N T E N T
U.S. stocks tumbled Thursday, while Treasury yields sank for a fourth day, as investors unwound bets on a spell of high growth and inflation.
The S&P 500 lost 1.4% Thursday morning, a sharp reversal from Wednesday when the broad stock-market gauge closed at a record. The Dow Jones Industrial Average slid roughly 450 points, or 1.4%. Meanwhile, the technology-heavy Nasdaq Composite, which also notched a new high Wednesday, fell 1.4%.
Thursday's selloff across the U.S. market was broad-based, and came after investors pulled back from equities around the globe. All 11 sectors of the S&P 500 traded lower, with companies including Carnival , Discover Financial Services and Expedia Group posting among the steepest declines. Each recently lost 3.5% or more.
Stocks have powered to a series of records this year, but some investors have grown concerned about the outlook for the economy on signs that labor shortages and supply-chain bottlenecks may crimp the pace of recovery. The spread of the highly contagious Delta variant of coronavirus globally is adding to worries. Investors also are gearing up for a spell of potentially volatile summer trading, when trading desks tend to be lightly staffed.
"There is a bit of a recognition that things aren't looking as economically positive as they were in mid-June when everything seemed to be hitting that Goldilocks middle ground," said Edward Park, chief investment officer at Brooks Macdonald. "Delta, or the next Delta, will be a recurring risk in markets," Mr. Park said, adding that surveys of U.S. activity had fallen short of expectations in recent days.
On the economic front, the number of people filing for unemployment insurance rose unexpectedly to 373,000 last week, slightly higher than the 371,000 who filed claims the week before. The recent level of new claims is significantly down from last spring’s peak of 6.1 million, and roughly in line with historical averages.
In a sign of jitters among investors about the virus, sectors that had benefited from the prospect of a speedy economic expansion, like energy producers and banks, have lagged behind shares of rapidly growing tech companies in recent weeks.
Government bonds continued to rally , pushing the yield on 10-year Treasury notes down to 1.285% from 1.321% Wednesday. The benchmark yield, which helps to set borrowing costs throughout the economy, was last below 1.3% in February. Yields drop when bond prices climb.
Driving yields lower is a combination of waning confidence in the strength of the economy post-pandemic and technical factors including the flushing out of wagers that they would keep heading higher, analysts say.
Appetite for government bonds may abate again when data show that the U.S. labor market is tightening over the summer, said Trevor Greetham, head of multiasset at Royal London Asset Management. “We’ve still got a lot of economic growth to come through.”
Oil prices slipped, pushing benchmark Brent crude futures down 0.8% to $72.88 a barrel. A standoff within OPEC has raised the prospect of higher production by members of the cartel. However, some traders say the fall has been driven by investors unwinding bullish commodity bets rather than a change in the supply outlook.
Cryptocurrencies fell across the board, alongside the broader selloff in riskier assets. Bitcoin slid 6% from its 5 p.m. ET Wednesday level to $32,473, according to CoinDesk. Ether, the second-largest cryptocurrency by market value, and joke crypto dogecoin each sank 9% or more.
In overseas markets, the Stoxx Europe 600 lost 2%. The European Central Bank said Thursday it would aim to keep eurozone inflation at 2% over the medium term, instead of the current target of just below 2%, and would allow room to overshoot its target when needed.
European government bonds rallied alongside Treasurys. The yield on 10-year German bonds fell to minus 0.313%, from minus 0.297% on Wednesday.
“We’re seeing some of the more stubborn reflationists forced out of their positions,” said Richard McGuire, head of rates strategy at Rabobank, noting the expense of short selling government bonds when yields fail to rise. Uncertainty about the prospects for inflation and the direction of monetary policy has also subsided, helping to pull down yields, he added.
In individual stocks, Kansas City Southern fell 7.3% after the railroad said it had scheduled a shareholder meeting to vote on its proposed tie-up with Canadian National Railway .
China’s Shanghai Composite Index fell 0.8% by the close and Japan’s Nikkei 225 lost 0.9%.
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Inflation, another housing bubble and more massive federal spending on the way.
It’s all based on fears of democrat policies. Spending, taxes, inflation, Wokeism, interest rates, instability. The only thing going up right now is crude oil.
[deleted]
[deleted]
Do you seriously believe fears of the new Covid variant has nothing to do with it?
So why are the Dems (according to your theories) so good for oil stocks?
They aren’t good for oil stocks. They are great for oil commodity futures bidding on the up side. I sold all my oil companies stocks when Biden became President and replaced them with oil commodity futures. I bought tracking ETF’s that make me money the higher the price a barrel of oil goes.
OMG!
THE SKY IS FALLING!
MARKET IS TOTALLY CRASHING TODAY! (DUE TO BIDEN'S ULTRA --SOCIALIST AGENDA!)
WE MUST TAKE VIC'S WISE ADVICE...AND SELL EVERYTHING ASAP!
As any experienced trader (or investor) knows, the notion that a one day move in the market indicates a trend is sheer foolishness:
The Dow shed close to 500 points . . .
So . . . I just voted up this (ridiculous) seed!
[Now why in the world would I do something like that...?
]
The price of oil goes up, futures go up. But the price of oil company stocks also then go up.
Oil company stocks are like in any sector-- some are much better than others.
I've never traded futures-- if I wanted to do something like what you're doing I'd trade options. Buy a few good oil co's, and sell covered calls. (Actually selling covered calls lowers the risk while generating income at the same time!
I used to own Gold, as an inflation hedge, via IAU. (most people are more familiar with GLD which is very similar. Slightly more liquid, slightly higher fees). I've also fooled around with Palladium and Silver.
Now-a-days many of the people who used to buy exposure to metals (and to some degrees other commodities) as an inflation hedge buy some sort of Bitcoin as an inflation hedge.
P.S: I forgot to mention-- why not buy oil stocks instead of futures? In addition to rising with the (expected) rise in oil prices, in many cases you also get a juicy dividend. For example, KMI pays almost 6% dividend which you can DRIP.
And then you could buy another sort of oil company-- an MLP. ("Master Limited Partnership"). Those companies have special tax advantages. And they generally pay fairly high dividends. Also, their price is less correlated to the price of oil or other problems with oil company stocks because they don't produce (or own) commodities- they just transport it! They're like a "toll road".They just keep collecting fees...
Not in our economy. Perhaps in world markets abroad.
I never said the sky is falling. Yet. Right now besides a few UN overturned executive orders and the ridiculous so called stimulus we are still pretty much living in an economy governed by Trumps economic actions. No reason to fully bail right now. Now if you are over 60 like I am one should be moving in a more conservative direction.
I once owned Exxon Mobil. I once had an oil company etf. I don’t do futures options. Only tracking indexes. USO and the like. Natural gas too. I’d never buy EXXON Mobil again now that it’s board has been compromised.
I own physical gold, copper, and silver. The copper and some nickel in a big danish cookie tin under my bed and the gold and silver in a safety deposit box at a bank. As to paper I have iShares gold the IAU you mentioned as well as their silver and palladium funds which are backed by the real thing. I also have copper and platinum as well as industrial metals in etfs.
I also have exposure to food based commodities and to a general all commodities etf. I also invest in the Canada and Australia international market etfs because their economies are so natural resources commodity dependent. Chile became too volatile for that purpose.
Not in our economy. Perhaps in world markets abroad.
First of all, most oil companies function world wide.
Secondly, the price of oil, and more imporsantly oil related stocks, is effected by events worldwide!
It doesn't matter what our government does, if, for example, an Iranian ship starts acting provocativly towards an American ship in The Arab Gulf. (AKA "The Persian Gulf")-- guess what happens to the price of oil?
. Now if you are over 60 like I am one should be moving in a more conservative direction.
Well, in the old days, people were advised to own a mix of stocks (for growth, not necessarily for income) and Bonds (for income.
The idea was that when you were young, it should be almost entirely Stocks-- as you got older it should move towards becoming mainly (or totally) bonds.
Of course not that rates are so low, in most cases bonds don't serve their tradition purpose. So many people are buying so-called "Bond Equivalent Stocks"-- i.e. stock that may not have much price appreciation-- but pay really big dividends.
I own physical gold, copper, and silver. The copper and some nickel in a big danish cookie tin under my bed and the gold and silver in a safety deposit box at a bank. As to paper I have iShares gold the IAU you mentioned as well as their silver and palladium funds which are backed by the real thing. I also have copper and platinum as well as industrial metals in etfs. I also have exposure to food based commodities and to a general all commodities etf. I also invest in the Canada and Australia international market etfs because their economies are so natural resources commodity dependent. Chile became too volatile for that purpose.
Sounds like you are really well hedged against inflation!
Here's an interesting stock. Food, so its an inflation hedge. I used to own it but needed cash to put elsewhere so sold it. B&G Foods (symbol BGS). Recommended by some very smart people Another thing I like about it-- pays dividend just over 6%. (Metals are a good inflation hedge of course, but if you're waiting for inflation to sky-rocket, in the mean time there are other things that pay nice dividends...so in a sense, with them you "get paid to wait"
And real estate-- building, land, etc are an inflation hedge IMO. Therefor I like REITS (although caustious about buying more now since most good ones have moved up a lot.) And generally most REITS provide a nice dividend.
Spending, taxes, inflation,
Recently came across this video-- another opinion.
FWIW: What Wells Fargo thinks are the best inflation hedges:
Here's The Best Asset To Own When Inflation Strikes, According To Wells Fargo
And yet, more Americans now say that we are on the "right track" than felt that way in over twenty years...
Posting facts and figures would be helpful.
If I say so, bank on it. Try and prove me wrong.
Can't prove you wrong because it's bullshit. There are no surveys that support what you say. Well except for this one.
2017 is hardly 20 years ago.
Lol ..... excuse everyone here if we aren't slain by your self anointed omniscience ...... humor us with proof if you have it.
Otherwise your comment is garbage and you know it.
You made the statement so it’s on you to prove it and until you provide the documentation asked of you we will assume you to be totally wrong.
So . . . are we now playing the "Fifty Million Frenchman Can't Be Wrong" card?
Sophie Tucker - Fifty Million Frenchmen Can't Be Wrong 1927 Billy Rose
So . . . are we now playing the "Fifty Million Frenchman Can't Be Wrong" card?
I just realized that is a rather obscure reference.
I have found through experience that understanding this principle has really helped me have a much deeper understanding of things...
Basically its about a tactic occasionally used in an attempt to bolster a position. iThe notion being that If a lot of people do...or say...something, it must be true!)
Two other examples that perhaps many people can relate to:
1. Advertisers saying that more people use their product than that of their competitors--- implying that that somehow "proves" its better...
2. Another variation (BTW this one is a favourite of Trump and many of his sycophants): Playing the "many people are saying" card:
Many people are saying that . . .
Again, implying that that somehow that "proves" it must be true)
[And of course there are many people who feel that when Trump employs this tactic...well, let's just say that he's not exactly playing with a Full Deck")
Bob Nelson-- where are you when we need you...?
Anyone who is informed about the way the stock market works would not be upset about a one day pullback.
Just curious-- how long have you been trading?
Today is a different day but a pull back at some point is almost inevitable unless the March /April 2020 one was recent enough to put it off some more.
After my many years in the Market, one useful thing I've learned is that a pullback at some point is always inevitable!
Although for most people its hard to know the following things about the inevitable "pullback":
1. When it will occur
2. How long it will last . . .
3.And the relative severity of the "pullback" (2%? 5%? 10%? 25%? or more...?)
Just curious-- how long have you been trading?
AHA! Just as I thought!
Do you get the feeling that some want Biden to fail?
For the American economy to succeed and remain strong the policies put forward by Biden and congressional democrats must fail.
Is that what you learned [deleted]
Seriously? I have a friend who is all Trump all day, and in his opinion Obama gave Trump the worst economy in the history of the US.
So, some people will continue to say Biden is and will fail, no matter the state of the nation.
He is failing, bigly
His supporters are in total denial
Is that what the tell you on Newsmax and OAN?
It's true. Biden has been POTUS for 6 months and has yet to submit a tax cut for millionaires and billionaires. That is the only way the right wing judges success and failure.
No, Biden himself has not. But there are plenty in the Democratic Party who have proposed tax cuts for the wealthy. Ever hear of SALT?
You do have problems staying on topic, don't you?
Is this the topic of the seed?
Yes it is, yet you try to deflect off of Biden.
Biden and his allies that control both houses of the legislative branch are a package deal.
Ever hear of SALT?
Unlike the many on the left from2016 to 2020 failure is the last thing i want to see from any President.
Not all of us are triggered, petty little bitches they were.
Boop! Well, you have missed that buying opportunity. Stocks have already rebounded to near record highs.
hahaha look again.........................
Dow down 233.90
Nasdaq down 124.49
S&P down 32.5
Which are still barely below their all time highs.
WOW! That ain't happened ever before ... /S
Been averaging my equities out to cash equivalents since January. Started at a mix of 70-30 equities to bonds/cash equivalents and working towards 20/30-70/80. After years of tepid growth i've been killing it since 2016.
With three straight months of inflation rates we haven't seen in decades everyone should be doing the same thing. I lived through that shit in the late 70's and early 80's i ain't getting caught in that vice again ....
Since I turned 60 last year I started taking the foot off the gas so to speak. I’m at 45% equities 30% bonds and 25% cash/ cash equivalents as of now at 61.2 yrs old.
With three straight months of inflation rates we haven't seen in decades everyone should be doing the same thing
Many companies are hurt by inflation-- but some are not.
And some even do better!
Generally the banking sector does much better with higher inflation...
And of course commodities do much better with inflation (Both the commodity itself, ex: Gold-- also somewhat producers of the commodity ex: Gold miners.
Physical property in many cases is helped by inflation (with inflation it takes more dollars to buy land, a house, etc so their prices go up not down).
I really like REITS here (although some of them are starting to get a bit expensive)-- plus they generally pay decent dividends. (I own several, one of my favs is SLG which pays about 4.6%. and IIRC, xxJefferson owns SPG which is another good one).
"REIT" = "Real Estate Investment Trust"...
Most of the advantages of actually owning a rental property and collecting rent without the problems of being the actual landlord (dealing with crazy tenants, or tenants that can't/don't pay rent, minimizing possible weather related damage, mudslides, forest fires, etc. etc).
I have some in REIT’s and some in home construction companies. Again through exchange traded funds.
I have some in REIT’s and some in home construction companies. Again through exchange traded funds.
I'm mainly going for income, not growth. So I am greatly overweight stocks-- but stocks that pay good dividends.
I used to own a lot of AT&T years ago-- pretty safe 4% dividend. I had thought any dividend approaching 5% (or more!) was too risky. And anything paying 3% or less wasn't providing enough income.
Now I generally don't buy anything unless it pay 5% or better. (The challenge is find stocks that pay good dividends that are sustainable, and the company is solid).And a few at 6% or 7!
Mostly high dividend payers. Then only , maybe 2 or 3 bets of fairly speculative stocks (zero dividends).Talk about speculative-- bough Mindmed at 35/share. Yup--that's 35 cents!
Also added CRWD and PANW. Wasn't too happy about tying up cash in 2 non-dividend payers...but they are cyber-security, & those threats IMO are much worse than even many on Wall Street realize. (Not buying more-- they're really expensive) Would actually be good for selling puts (which raises cash plus buys it at lower price..but increases risk)but I no longer trade options.
Since I have very little in single company stock, I do have high dividend stocks in several exchange traded funds devoted to dividends as well as REIT and home builders ETF’s.
TIPS are supposedly nice during high inflationary times as well but none of that is guaranteed. The best guaranteed you can get is cash. Much more so than any equity or bond related instrument.
If the dollar tanks you've got much bigger worries than your investment accounts
I'm so worried about the millionaires and billionaires!
Yeah, because millions of Americans who are not millionaires or billionaires don't have millions in the stock market. Who cares if the market crashes?
SMMFH
Get back to us when the stock market crashes...
Read carefully. I didn't say that the market crashed.
So there's that fact to consider when reading your post.
What happened in March/April
2020? We know why it happened and that with the wrong federal policies it could again.
I'm so worried about the millionaires and billionaires!
Now-a-days a Million Dollars ain't what it used to be! For a family of four who has two kids they want to send to college and for whom they may have to pay exorbitant university fees someday-- a family net wotrh of a million dollars is hardly "rich". Not poverty, but not enuf for a wealthy lifestyle anymore.
(And probably a lot of their "wealth" is not liquid....so they can't raise a lot of cash if an emergency arises...).
This is a yawner of an article ... stocks go up and down under any President and the pros or cons file out to bleat about it tagging along their cherry pickings.
I see you here.
And?
"the pros or cons file out to bleat about it tagging along their cherry pickings."
(This could get tiresome) And?
I am sure if you think a little about it you'll get the point.
And if not, oh, well.
I made my point @5, neither praising nor condemning any President nor his particular followers.
It seemed that when he said I see you here that he was agreeing with you on that point. So why keep arguing?
So why keep arguing
Because NT is a Social Media site.
Over the years I've discovered most people who spend considerable time on Social media sites do it because-- they love to argue.
Yes--Arguing...where the purpose is to "defeat" your opponents argument. Its about being "right" and proving your opponent to be "wrong".
Of course there's an alternative to constantly arguing, and obsessievly trying to be "right"-- and that is engaging in a true discussion. Where the objective is not to "win"-- but rather to learn stuff. To discover the actual facts!
(Interestingly, I've discovered that most people who prefer discussions (to learn stuff) rather than arguments (to prove that they're right) have an interesting personality trait-- they're generally very curious people.
stocks go up and down under any President and the pros or cons file out to bleat about it tagging along their cherry pickings.
True.
And in addition-- a big one day move of the market, either up or down, is no big deal if you've invested wisely.
One of the things that many people don't realize is how wealth is created in a Capitalist system (when its functioning as it should-- although of course many politicians, grifters, and other con artists often can screw it up...for a while). Wealth is created by the ingenuity of inventors who invent great things, entrepreneurs who start business, etc...and hard working people who work in the businesses created..
The politicians really don't do much that helps, regardless of their politics. (Often the best thing they can do is undo the worst policies of some prior administration, but they're not the ones who create wealth).
(And sometimes, the main thing politicians can do-- if they're really terrible-- is fuck things up a bit for a time. But eventually they don't get re-elected..or in some cases thrown in jail).
And BTW, for a smart investor, rising inflation is not as big a problems as some folks with a political or other agenda would like to have us believe. (If you own a lot of equities you mainly have to shift more towards sectors that benefit from inflation...and/or some are just relatively unaffected by it).
A bear market is a drop of 20%. A crash down 40%.
The market dropped 2% but is already rebounding...
According to Trump, it was going to be down 100%!
The Chicken Littles in the gop are hysterical ninnies.
According to one of the left's favorite economists, we were going to crash under Trump.
Wrong!!!
And, didn't the markets crash under Trump?
Nope.
Even your link doesn't support your claim.
And that was simply if he got elected. Au contraire LOL
Krugman is a major ass.
I've met him twice and once with his wife Robin (a delightful woman) pub hopping through Dublin, were he an ass there is no way she would have married him.
One woman's husband is another person's ass.
[Deleted]
And your failing comedic career isn't any concern of mine either!
Aw ... but you bring the schlap to my shtick.
Generalize much?
Never would I deny you the pleasure of schlapping your own shtick!
Okay, since you want to pretend you don't know who I am referring to:
Paul Krugman.
I trust that will suffice as specific enough for you.
As of 1:06 EST the market is up over 400 points today.
Yup
🙂
Why do people post silly seeds like this one? From the graphs, you can see that the trend is upward. This article is predicated on a myopic look at a small interval; e.g. the tiny valleys on the extreme right of the following Dow & S&P 500 graphs:
Shhhh...the Trump crowd has already made up their mind.
Don't confuse them with the actual facts!!!
They are making thenselves scarce today...
The Dow closed up 448 points today. Someone better warn Chicken Little.
I'm willing to go on record. ..and make a prediction!
Here it is:
At some point within the next few weeks, the Market will have yet another "correction"-- it will have yet another fairly big down day!
Yes, when markets are bouncing around their historic highs there is some volatility if for no other reason than big holders taking profits...
And anyway, one or two days does not a trend make.
We've had that down day-- then an up day,.
Let's give Mr. Market one more day-- to see if there's any actual trend.
I will return here after the close on Monday to see if any discernable trend is developping.
OK-- so stocks went down one day and people are saying that means the economy is collapsing!
But then it went up the next day!
Certainly seems like a case of YBMM: ("Your Basic "Mixed Messages"!) What to make of it?
Well there's one technique come in useful here.."The Rule of Threes"!!!
Down Once. Up Once. We must apply this rule to find the true trend!! We need a third day.
So I purpose we apply the actual "Rule of Threes'- we need to watch Mr. market for one more day!!
So-- let's see what happens the next trading day. (This coming Monday)
Well....now its Monday! (After the close)
Good time to evaluate the prediction-- and compare it to the actual results!!!
Here's the essence of this seed:
U.S. stocks tumbled Thursday, while Treasury yields sank for a fourth day, as investors unwound bets on a spell of high growth and inflation.
The S&P 500 lost 1.4% Thursday morning, a sharp reversal from Wednesday when the broad stock-market gauge closed at a record. The Dow Jones Industrial Average slid roughly 450 points, or 1.4%. Meanwhile, the technology-heavy Nasdaq Composite, which also notched a new high Wednesday, fell 1.4%.
Thursday's selloff across the U.S. market was broad-based, and came after investors pulled back from equities around the globe. All 11 sectors of the S&P 500 traded lower, with companies including Carnival , Discover Financial Services and Expedia Group posting among the steepest declines. Each recently lost 3.5% or more.
"There is a bit of a recognition that things aren't looking as economically positive as they were in mid-June when everything seemed to be hitting that Goldilocks middle ground," said Edward Park, chief investment officer at Brooks Macdonald. "Delta, or the next Delta, will be a recurring risk in markets," Mr. Park said, adding that surveys of U.S. activity had fallen short of expectations in recent days.
And one notable opinion:
It’s all based on fears of democrat policies. Spending, taxes, inflation, Wokeism, interest rates, instability. The only thing going up right now is crude oil.
The key points here IMO:
1. Everyone's entitled to their opinion. But baing one's trading/investing based on one's political views is not productive.
2. Attempting to base a prediction of market action based on a s ingle day-- or a few days recent trading is, more often that not, very counter-productive.
3. When an entity spends money-- some other entity gets that money. So the government spending more money means another group gains money! More spending means thos entities receiving the money will spend (and/or invest) part of it. Which means many businesses will do better...and stocks will go up.
OK-- so after all the predictions of doom and gloom-- what did today?
Here's the essence of today's market moves:
U.S. Stocks Edge Higher to Records
Today 4:07 PM ET (Dow Jones)
July 12, 2021 16:07 ET (20:07 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
U.S. stocks edged higher to records Monday
Dammit, the market is falling apart, please, now and in the future do not use facts that would be against moosh nooshes (dumb asses) spouting stupid shit.
My bad!
As a longtime stock market trader/investor, over time I've come to develop a dangerous addiction-- I've become addicted to trading on actual facts rather than emotion, political views, unsubstantiated rumours, news from politically biased sources, etc.
What nonsense, trading on actual facts.