S&P 500 Tumbles in Worst Stock Rout in Four Months: Markets Wrap

[TomCADem]

Source: Bloomberg

(Bloomberg) -- Stocks tumbled in the U.S. and Europe as rising coronavirus infections and tougher lockdowns added to worries about the economic hit from the pandemic.

The S&P 500 Index fell 3.5%, the biggest drop since June, amid a surge in Covid-19 hospitalizations, especially in the Midwest. Energy shares sank with oil prices, and technology stocks were also among the worst performers, with Microsoft Corp. down after a disappointing forecast. The VIX Index, a measure of expected U.S. equity volatility, climbed to the highest level since June.

The U.S. and European stock benchmarks are both down more than 5% this week as virus cases surge and after American lawmakers failed to agree on an economic aid package before the Nov. 3 election. Analysts are also warning about increased volatility ahead of the presidential vote and in its aftermath, with some saying that a contested outcome is still a worrisome possibility.

“We’ve obviously got the election hanging over our heads. Then obviously Covid accelerating to the degree that it has both here in the U.S. as well as in Europe,” said Lori Heinel, deputy global chief investment officer at State Street Global Advisors. “And then you’ve got the lack of stimulus, which in our estimation is still necessary to get us through this period until we get an ultimate medical solution. It’s the triple whammy right now.”

Read more: https://www.msn.com/en-us/money/markets/sandp-500-tumbles-in-worst-stock-rout-in-four-months-markets-wrap/ar-BB1as1kL?li=BBnb7Kz

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This reminds me of the stock route earlier this year when the President initially blew off the pandemic. Now, you have the White House celebrating how Trump ended the pandemic even as cases and hospitalizations are surging.

[cilla4progress]

1. Husband is retired and we rely on

his pension and small investment savings.

Keep that in mind when I say a small yay! Just for now...

[NRaleighLiberal]

2. same boat here.

odd to be looking at news like this both ways...hurting trump but also hurting many good Dems

[USALiberal]

13. +1000! nt

[Gore1FL]

22. It hurts everyone retired and hoping to retire

The good news is that it is an opportunity to invest at lower prices. We will recover.

[bucolic_frolic]

3. Yeah impending crash has been all over YouTube for a few weeks, though many hedge even that

should find support around 3200, or the moving average around 3125. I think we crash into the election. A clear Biden win would jump the markets in a relief rally. Conversely a drag 'em out brawl over the outcome will tank things worse. Right behind that of course covid. Could be well into April before we rebound from the election and have a viable plan to deal with the pandemic. Vaccine will be a big disappointment because it will take a couple years to produce; in the meantime they will prioritize vaccinations - essential workers first.

Or perhaps Mr. Stable Genius will announce a vaccine tomorrow morning, Thursday prior to election day being the day most undecideds finally - decide!

Wild Card .... Civil War ahead? Do I expect to see this go smoothly? No. It's unclear who will oppose Trump shenanigans. State militia I would assume, but perhaps or likely only in states with Democratic Governors.

[TomCADem]

8. TRUMP SAYS STOCK MARKET HOTTER THAN EVER AS DOW JONES FALLS 1,000 POINTS ON CORONAVIRUS FEARS (Feb)

Remember in February when the stock market started crashing as COVID cases increased while Trump insisted that everything is under control? Well, cases and hospitalizations are rising while the White House is bragging about ending the pandemic.

Link to tweet

?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1232058127740174339%7Ctwgr%5Eshare_3&ref_url=https%3A%2F%2Fwww.vanityfair.com%2Fnews%2F2020%2F02%2Fdonald-trump-coronavirus-stock-market

https://www.vanityfair.com/news/2020/02/donald-trump-coronavirus-stock-market

On Monday, the Dow Jones Industrial Average closed down 1,031.54 points, or 3.55%, its biggest point drop in nearly two years. The S&P 500 also had its worst trading day since February 2018, falling 3.35% to 3,225.89 and erasing its year-to-date gains, while the Nasdaq Composite closed 3.7% lower at 9,221.28. When markets move one way or another, analysts rush to provide an explanation, despite the fact that sometimes there isn’t a simple answer for why, in Wall Street terms, things “shit the bed.” Today though, it appears pretty obvious that the biggest factor was the combination of a surge in coronavirus cases outside of China and the realization that Donald Trump has no idea what he’s doing in terms of a response, which is true in most circumstances but particularly worrisome when a deadly virus is concerned.

Over the weekend, Italy, South Korea, and Iran all reported unexpectedly sharp increases in cases. In Italy, which now has the biggest outbreak outside of Asia, there were more than 200 confirmed cases and five deaths as of Monday; in South Korea the number of infected hit 833; and in Iran, the death count jumped to 12. While investors had initially banked on the economic fallout being contained to China, as was the case in the 2002–2003 SARS outbreak, that hope was obviously misplaced (and a tad naive given how connected China is to the rest of the world and the fact that supply chains on basically every continent rely on China for labor and manufacturing). “Whatever optimism in the markets recently about the coronavirus resolving quickly has evaporated with the spread to South Korea and other countries,” John Kilduff of Again Capital told the Washington Post. “Demand for commodities of all stripes has cratered in China and aviation traffic is plummeting as well.” Gregory Daco, chief U.S. economist for Oxford Economics, noted that Monday’s market declines reflect how quickly the situation could move from a threat to supply chains to a full-out tightening of financial conditions: a sharp increase in volatility could lead to businesses pausing planned investments and today, investors pushed up the price of the U.S. dollar as they fled to safer assets.

[bucolic_frolic]

9. I missed the connection between the two at the time

To me he's like a corporate PR machine that always denies and deflects any problems.

I always remember Three Mile Island. "Is there any threat to people in the area?"

"There is no immediate threat to public health."

So no one was vaporized, and any cancer risk was later.

Thanks for the OP and links.

[TomCADem]

14. What is amazing is that the WH is doing the exact same thing it did in February through April

It is only when they started to take some action, including supporting the CARES Act, that things turned around.

But, Trump is acting like COVID-19 does not exist or that it is in the past. It is getting really scary with the COVID numbers starting to stream in with Trump holding rallies without a care in the world.

[modrepub]

4. The Day I See The Company Upper Brass

showing up for a bag of groceries at the food bank is the day I'll care about those living off the stock market. Take care of the regular salary earning folks, provide job training for the displaced workers and tackle agism in the workplace and the market will take care of itself along with the rest of us. Too much is concentrated for too little.

[marie999]

7. Many "regular earning folks" and retired people

have IRAs and 401Ks. If they are retired, they need the money they have invested.

[modrepub]

12. True

But the older you get, the less invested in the market you should be. By retirement age, you should be in bonds and money markets.

My point being, the Wall Street crowd rarely suffers as much as the regular folks.

[ck4829]

5. Kick

[Warpy]

6. Not surprising for October

especially the week before an election. It's going to take some time for any sort of sanity to prevail, so many investors are convinced Biden will nationalize all industry and collectivize everybody into the same poverty other Communists have done. Yes, that was sarcasm.

[Auggie]

10. IMO small investors who'd been riding this bull market should have gotten out months ago

[yaesu]

11. The worst rout in hours!

them poor, poor banksters, that 7 trillion stimulus check they got just wasn't good enough so they got to put on another show, please sir, may I have another??

[Evolve Dammit]

15. And half of Americans own zero stock. No nuthin. It is not our economy.

[former9thward]

23. Not true.

Most working Americans have some sort of 401k plans available to them. So they are in the market.

[Evolve Dammit]

26. OK 55% per Gallup

https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx

[orangecrush]

16. Winning bigly

[Generic Brad]

17. Good time to go on a buying spree

I just placed orders with my broker for tomorrow. I've been expecting something like this to happen. One more mini plunge before the end of the year wouldn't surprise me either.

[TomCADem]

20. Meh, Don't Try to Time the Market

Don't get me wrong, you should periodically check to make sure your asset allocations are not totally out of wack, and just doing that will automatically cause you to buy on the dips and sell at the peaks. But, the Robin Hood investors of today are similar to the day traders of a few decades ago buying Iomega or some other hot stock. Also, if you have a broker, how do you keep commissions from eating a sizable share of your investment returns?

[Generic Brad]

21. I use my credit union's wealth manager

They don’t take fees. With the low interest rates I keep some spare cash in a money market brokerage account. There are some specific mutual funds I keep my eye on and and invest some when the price dips below an agreed upon level.

I would prefer to invest as soon as I have the money to commit, but I have a very risk averse spouse and need her buy in before investing.

[icwlmuscyia]

18. How many stock crashes in 1 year does a fake president get before people

finally throw his ass out for good?

[Yavin4]

19. The Mitch McConnell crash

No fiscal stimulus is a bad omen for future consumption, esp. with Christmas around the corner.

[gab13by13]

24. The market will go up tomorrow,

I think the GDP numbers come out tomorrow and they are supposed to be decent. 4th Quarter GDP will bring the market back down though.

[Steelrolled]

27. Good prediction, S&P 500 up 1.19%

I'm in the market as much as I should be, but I'm still tempted to put a little more in. Generally the market looks at the long term, but there are times it gets caught up in the news of the day.

[Aussie105]

25. It's the second wave

of global market cringe due to the pandemic, the mishandling of the response in some countries, and the realization it actually is a problem that won't go away soon.

Not unexpected, surely?