Nasdaq in bear market, first of the three major U.S. indexes

[rooster59]

Nasdaq in bear market, first of the three major U.S. indexes

By Caroline Valetkevitch

 

The Nasdaq logo is displayed at the Nasdaq Market site in New York September 2, 2015. REUTERS/Brendan McDermid

 

NEW YORK (Reuters) - The Nasdaq Composite Index <.IXIC> confirmed on Friday it is in a bear market for the first time since 2008, underscoring fears that the longest bull run in history for U.S. stocks could soon be over.

 

The index finished the day down 21.9 percent from its Aug. 29 record closing high, exceeding the 20 percent decline considered the threshold for a bear market.

 

The Nasdaq is the first of the three major U.S. stock indexes to cross that threshold, with its drop in less than four months the latest sign that the bull market that began during the financial crisis a decade ago could be almost done.

 

Several other key indexes in recent days have confirmed they were in bear markets, among which are the Russell 2000 small-cap index <.RUT> and the Dow Jones transportation average <.DJT>.

 

The S&P 500 <.SPX>, the benchmark for U.S. stocks, is not yet in a bear market, though more than 60 percent of its components are.

 

The S&P 500 is down 17.5 percent from its Sept. 20 record high close, while the Dow Jones Industrial Average <.DJI> is down 16.3 percent from its Oct. 3 record.

 

The Nasdaq's fall reflects a sharp move by investors away from what had been the market's leaders - the so-called FAANG group of five favorite technology and internet stocks.

 

"It's the old saying, the generals finally got hit," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

 

GRAPHIC: The bear approaches -

 

The latest round of selling, which on Friday dragged the Nasdaq down nearly 3 percent to its lowest closing level since August 2017, comes two days after the Federal Reserve raised interest rates for a fourth time this year, as the U.S. central bank continues to unwind the low interest-rate policy that supported stocks for nearly a decade.

 

Concerns of slowing economic growth have also led investors to flee stocks high-valuation sectors such as technology and communication services.

 

In Nasdaq's record-long bull market, which ended with its all-time-high close on Aug. 29, the index gained more than 539 percent from its post-financial-crisis low on March 9, 2009. Including reinvested dividends, it delivered a total return of more than 611 percent in that time.

 

By contrast, in that same period, the S&P 500 <.SPX> gained just 331 percent, with a total return of 425 percent. Even with the drop since late August, Nasdaq is nearly 400 percent above its March 2009 low, with a total return of more than 456 percent.

 

"Nasdaq is your more growth-oriented story, so the biggest stocks are driving the overall market because they're a bigger chunk of it," said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.

 

Past Nasdaq bear markets have lasted a long time and cut deeply. For instance, the Nasdaq fell 55.6 percent during its last bear market, which ran from Oct. 31, 2007, to March 9, 2009.

 

Some investors are not convinced the current bull market is over for the S&P 500. Many strategists still are forecasting the S&P 500 will end next year with modest gains.

 

"The market is caught up in this hysteria," said Ken Polcari, managing principal at ButcherJoseph Asset Management in New York. But "it's an overreaction," he said, "and if you're a long-term investor, the last thing you should be doing right now is selling."

 

 

-- © Copyright Reuters 2018-12-22

[Tug]

Looks like Donald’s tax cut for the rich has run its course now we will reap the consequences of Donald’s mismanagement tired of winning yet?

[Pedrogaz]

The Donald is apparently only responsible for the rise in the global stock markets.....but he has nothing to do with this downturn which is caused by the Fed's quarter point rise in interest rates. Must be nice to be right all the time.

[Jonnapat]

Haven't seen Trump tweet about the stock market for some time now.

Wonder why?

[Peasandmash]

This isn't a big deal for most folks. the decline in market valuation effects those with money.  the swing in the market isn't going to effect most of the low/middle class, it might even help them if they are saving into a retirement fund.  if you get dividends they may be lower next quarter, maybe not. this is a rich man's tax and not a middle class problem. 

Merry Christmas

 

[Becker]

Little activity by the trumpets in this thread. Probably tired of all the winning!

[welovesundaysatspace]

2 hours ago, Peasandmash said:

This isn't a big deal for most folks. the decline in market valuation effects those with money.  the swing in the market isn't going to effect most of the low/middle class, it might even help them if they are saving into a retirement fund.  if you get dividends they may be lower next quarter, maybe not. this is a rich man's tax and not a middle class problem. 

Merry Christmas

 

The middle class is not investing in stocks or funds? 

[bristolboy]

2 minutes ago, welovesundaysatspace said:

The middle class is not investing in stocks or funds? 

That is correct. 

We All Have a Stake in the Stock Market, Right? Guess Again

 

The riotous market swings that have whipped up frothy peaks of anxiety over the last week — bringing the major indexes down more than 10 percent from their high — have virtually no impact on the income or wealth of most families. The reason: They own little or no stock.

A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households.

https://www.nytimes.com/2018/02/08/business/economy/stocks-economy.html

[Cryingdick]

12 hours ago, bristolboy said:

That is correct. 

We All Have a Stake in the Stock Market, Right? Guess Again

 

The riotous market swings that have whipped up frothy peaks of anxiety over the last week — bringing the major indexes down more than 10 percent from their high — have virtually no impact on the income or wealth of most families. The reason: They own little or no stock.

A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households.

https://www.nytimes.com/2018/02/08/business/economy/stocks-economy.html

 

That's not exactly true Almost every office worker in America has retirement plan that is at least somewhat based on stocks. The truly rich normally have access to inside information, a good knowledge of the market and most importantly a boat load of money.

 

i did very well last week by shorting a lot of companies. The market tanked and i was back out by final bell. It was actually one of the easiest weeks I have seen to predict the market would tank because of the FED meeting. 

 

That is how many rich people get richer and part of the reason the market can fall and people still continue to build and grow their wealth. i put some money into the market but by the end of the day I was taking money out. As a trader I only require three things to be successful volatility, volume and a catalyst. when i say volatility it doesn't matter to me if that is upward or downwards.  i can go long or short it's of no consequence to me. the volume so i can get the required momentum and a catalyst that let's me know which way a stock can move in a day. Many savvy traders just want the market to swing as widely as possible because that's when you find good set ups. 

 

So it isn't traders that trade based off of more than a hunch that lose.

 

The people I think that get hurt are senior citizens that three months ago had a great retirement egg and it has lost a lot of value. Now the choice is cash out now or wait and risk it getting worse.  Those people don't have another 20 years to wait on a sluggish market so have no choice but to cash out and realize those losses. The typical retail investor has long shares and buys and forgets about them so they get caught in the steam rollers.

 

The ultra wealthy have strategists that play the game. They may lose a bit right now but when we consider what a guy like Buffett or any other billionaire invertor has done it is clearly the rich that do not lose money.  They have the knowledge, strategists and money to take advantage of volatility in ways the mere mortal can't. A guy like Buffett would look at least week and identify opportunities. As he has famously says get greedy when others are fearful. He was saying a few months ago it was hard finding good buys, that isn't the case now. He took a huge share of Apple and right now is down a ton of money. i bet he simply takes  a few billion more and buys again averaging his cost down by a fortune. With that kind of volume there are also dividends that are basically free money while you wait.

 

The only people that lost any money last week or people that got scared and sold or had to sell because they are really old and can't risk waiting. For the traders, the ultra rich and corporations it's just another day on Wall street. 

 

More people in the USA have money in the markets than at any point in history. So before you take too much glee in your schadenfreude you are actually taking pleasure in that old Grandpa that bought Apple because it's a 'solid' company. Zuckerberg didn't lose money even though FB got hit hard. He is billions upon billions of dollars ahead. He has repeatedly sold stock ahead of news that drives the stock down and has billions of realized gains. His 'losses' are unrealized and don't matter. 

 

The article you post is useful in the sense that it makes poor people feel better knowing the big guy got hurt but in the long run that never happens.

 

That was a lot longer than I intended.

 

TLDR

 

It's the retired guy living in a shoe box condo in Thailand that is more likely to be hurt. The condo won't move, health costs are going up and inflation  on the rise.

 

 

These are the type of people that sell under duress. The rich are the ones that come in and buy their losses.

 

 

 

 

 

 

[bristolboy]

4 minutes ago, Cryingdick said:

 

That's not exactly true Almost every office worker in America has retirement plan that is at least somewhat based on stocks. The truly rich normally have access to inside information, a good knowledge of the market and most importantly a boat load of money.

Had you actually followed the link the very next sentence after the three I quoted dispels that falsehood as well.  It is exactly true. 84 percent of stocks are owned in one way or another by the top 10 percent.

And I live in hope that someday someone is going to post how they lost their shirt on the stock market. That anonymous post is one that I will entirely believe.

[Cryingdick]

2 minutes ago, bristolboy said:

Had you actually followed the link the very next sentence after the three I quoted dispels that falsehood as well.  It is exactly true. 84 percent of stocks are owned in one way or another by the top 10 percent.

And I live in hope that someday someone is going to post how they lost their shirt on the stock market. That anonymous post is one that I will entirely believe.

 

You miss the point that the average American with a normal job living above the poverty level has a retirement fund involving stocks.  As far as the percentage ratio of people that own stocks it could be said that the top one percent control more than ninety percent of the worlds wealth. So the ratio simply follows that fact.

 

There are a ton of average middle class people ready to retire that will be the unfortunate    victims of the crash. The rich will only identify opportunities out of it and continue to become richer. 

[Cryingdick]

As far as losing your shirt and anonymous posters I have no idea what you are even talking about.

[sirineou]

4 minutes ago, bristolboy said:

Had you actually followed the link the very next sentence after the three I quoted dispels that falsehood as well.  It is exactly true. 84 percent of stocks are owned in one way or another by the top 10 percent.

And I live in hope that someday someone is going to post how they lost their shirt on the stock market. That anonymous post is one that I will entirely believe.

I am not on the top 10% and the last month has cost me a bundle. My retirement annuity down 

The Ahole in the white house will bury us all. 

[Cryingdick]

2 minutes ago, sirineou said:

I am not on the top 10% and the last month has cost me a bundle. My retirement annuity down 

The Ahole in the white house will bury us all. 

 

the funny thing is I was just watching some business reporter saying the other day this is a problem because more Americans own stock now than ever before. Don't worry too much about it my husbands 401k is in similar shape.

 

I hope you are a few years away from needing to cash it.  

[Cryingdick]

As far as Trump goes he has been good for the economy but doesn't control the market. He can move it up or down a few points with a tweet but the FED has the power. Everybody was expecting a rate hike and that was priced in. However they basically announced three rate hikes two do be done later on in the future. 

 

I sit at my computer everyday watching news and the markets as it is how i make a living. I can assure you that 2 PM right after the FED made the announcement stocks began to slip they then recovered a little bit. Then they wheeled out Powell who made a series of statements that the market did not like at all. That's when the stocks tanked steeply and never recovered.

[bristolboy]

15 minutes ago, Cryingdick said:

 

You miss the point that the average American with a normal job living above the poverty level has a retirement fund involving stocks.  As far as the percentage ratio of people that own stocks it could be said that the top one percent control more than ninety percent of the worlds wealth. So the ratio simply follows that fact.

 

There are a ton of average middle class people ready to retire that will be the unfortunate    victims of the crash. The rich will only identify opportunities out of it and continue to become richer. 

Did you actually bother to follow the link and read that one additional sentence? Doesn't look like it.

[lannarebirth]

43 minutes ago, Cryingdick said:

 

More people in the USA have money in the markets than at any point in history. 

 

 

Yeah, but whose money is it?

 

http://www.finra.org/investors/margin-statistics

[sirineou]

Just now, Cryingdick said:

 

the funny thing is I was just watching some business reporter saying the other day this is a problem because more Americans own stock now than ever before. Don't worry too much about it my husbands 401k is in similar shape.

 

I hope you are a few years away from needing to cash it.  

I am retiring end of this summer,

 don't need it to live on , both houses in the US and Khon Kaen are paid for and union pension provides for a comfortable living ,but I was hoping to take out some,  build some rental units in Khon Kaen for the wife, and to keep brother in law and my self busy , I guess the project will have to wait. 

  The problem is that a lot of union ,and municipal  pension funds , that are already underfunded have significant exposure in the market,and are for the most part insured for pennies on the dollar, I believe mine is insured for 60% .

  With baby boomers reaching retirement age  there are more people reaching retirement age straining the pension system, a significant hit in the market can put many retirement funds over the edge.

https://www.bloomberg.com/graphics/2017-state-pension-funding-ratios/  

 

 

[sirineou]

25 minutes ago, Cryingdick said:

As far as Trump goes he has been good for the economy but doesn't control the market. He can move it up or down a few points with a tweet but the FED has the power. Everybody was expecting a rate hike and that was priced in. However they basically announced three rate hikes two do be done later on in the future. 

 

I sit at my computer everyday watching news and the markets as it is how i make a living. I can assure you that 2 PM right after the FED made the announcement stocks began to slip they then recovered a little bit. Then they wheeled out Powell who made a series of statements that the market did not like at all. That's when the stocks tanked steeply and never recovered.

The market hates uncertainty! which this president provides a hefty amount of , add to it the trade war with China , and as you said rising interest rates........

[Cryingdick]

7 minutes ago, sirineou said:

I am retiring end of this summer,

 don't need it to live on , both houses in the US and Khon Kaen are paid for and union pension provides for a comfortable living ,but I was hoping to take out some,  build some rental units in Khon Kaen for the wife, and to keep brother in law and my self busy , I guess the project will have to wait. 

  The problem is that a lot of union ,and municipal  pension funds , that are already underfunded have significant exposure in the market,and are for the most part insured for pennies on the dollar, I believe mine is insured for 60% .

  With baby boomers reaching retirement age  there are more people reaching retirement age straining the pension system, a significant hit in the market can put many retirement funds over the edge.

https://www.bloomberg.com/graphics/2017-state-pension-funding-ratios/  

 

 

 

That's a tough spot. The economy is great right now but the market is a strange thing. All news is bad and good news can be even worse. I can only guess but I am thinking that we might recover a little bit maybe next earnings season. But for example the holiday retail report was all roses and yet every single retailer stock got hit. You would think a stock like Amazon could resist when it is reported holiday spending is up 4.5 percent. 

 

I am buying now because i think the markets over reacted. However the next election is not far off and the campaigning will be in full swing soon. That is going to cause a lot of angst. If you can wait awhile and get a significant percentage back I would maybe be looking to dump it before the election. If the market doesn't respond well to the election results (regardless of who wins) a good chance to liquidate your position might be a  long ways off after that.

 

Whatever you decide to do good luck with it.

[sirineou]

22 minutes ago, Cryingdick said:

 

That's a tough spot. The economy is great right now but the market is a strange thing. All news is bad and good news can be even worse. I can only guess but I am thinking that we might recover a little bit maybe next earnings season. But for example the holiday retail report was all roses and yet every single retailer stock got hit. You would think a stock like Amazon could resist when it is reported holiday spending is up 4.5 percent. 

 

I am buying now because i think the markets over reacted. However the next election is not far off and the campaigning will be in full swing soon. That is going to cause a lot of angst. If you can wait awhile and get a significant percentage back I would maybe be looking to dump it before the election. If the market doesn't respond well to the election results (regardless of who wins) a good chance to liquidate your position might be a  long ways off after that.

 

Whatever you decide to do good luck with it.

Thank you for your concern and kind words.

i will hold of until 2020, don't need it now , I think Americans are suffering from Trump fatigue by now ,

  I think the pendulum will swing the other way in 2020 and the markets will go crazy, A deal with China will also have a positive affect sooner than that. 

anyway we will see.

[Cryingdick]

14 minutes ago, sirineou said:

Thank you for your concern and kind words.

i will hold of until 2020, don't need it now , I think Americans are suffering from Trump fatigue by now ,

  I think the pendulum will swing the other way in 2020 and the markets will go crazy, A deal with China will also have a positive affect sooner than that. 

anyway we will see.

 

It isn't just Trump fatigue. A  good portion of the American public still like Trump. There is a lot of hatred  on both sides of the wall, pun intended. It is magnified by the media and in particular social media. Whatever side you are on there is somebody that makes money or has an interest in poking you with a stick to keep you agitated and get you clicking. In the old days you watched the evening news and supported Reagan or agreed with Dukakis. Then you went to bed woke up and went to work and that was that. 

 

One reason that the economy is good is because Trump basically removed a lot of environmental regulations that helped corporations at the expense of the environment. He also gave tax cuts at the expense of long term fiscal responsibility. Oil is way down as a result of dealing with slimy psychopathic princes and because we frack regardless of the environmental consequences. The economy is better because Trump puts money and the market above all else. He also mistakes the market for the economy. 

 

 

if the other side wins they want things like carbon taxes, higher wages, tightened regulations and will most likely repeal what little is left of the sugar high that was Trump's tax cuts.

 

For the moment I will concede the moral high ground on all of this to the democrats they are just and right. The problem is the market doesn't care what is right and wrong. It only cares about year on year growth and you must have record setting profits. It will be very hard to emulate those conditions and do the right thing. So when they get in they will say only rich evil people own stocks and the market will most likely be in for an ugly and violent correction. The market usually prefers the evil it knows. Change of any kind brings turmoil in general and especially to wall street. Wall street isn't a rational and moral beast.

 

 

[Cryingdick]

3 minutes ago, Cryingdick said:

 

It isn't just Trump fatigue. A  good portion of the American public still like Trump. There is a lot of hatred  on both sides of the wall, pun intended. It is magnified by the media and in particular social media. Whatever side you are on there is somebody that makes money or has an interest in poking you with a stick to keep you agitated and get you clicking. In the old days you watched the evening news and supported Reagan or agreed with Dukakis. Then you went to bed woke up and went to work and that was that. 

 

One reason that the economy is good is because Trump basically removed a lot of environmental regulations that helped corporations at the expense of the environment. He also gave tax cuts at the expense of long term fiscal responsibility. Oil is way down as a result of dealing with slimy psychopathic princes and because we frack regardless of the environmental consequences. The economy is better because Trump puts money and the market above all else. He also mistakes the market for the economy. 

 

 

if the other side wins they want things like carbon taxes, higher wages, tightened regulations and will most likely repeal what little is left of the sugar high that was Trump's tax cuts.

 

For the moment I will concede the moral high ground on all of this to the democrats they are just and right. The problem is the market doesn't care what is right and wrong. It only cares about year on year growth and you must have record setting profits. It will be very hard to emulate those conditions and do the right thing. So when they get in they will say only rich evil people own stocks and the market will most likely be in for an ugly and violent correction. The market usually prefers the evil it knows. Change of any kind brings turmoil in general and especially to wall street. Wall street isn't a rational and moral beast.

 

The evil rich will all sell out and leave the long investors like you with a depleted retirement account. edit: I didn't mean to quote myself like that but i guess will leave it like this.

Quote

 

 

 

[sirineou]

5 minutes ago, Cryingdick said:

Change of any kind brings turmoil in general and especially to wall street. Wall street isn't a rational and moral beast.

 All I can hope  is some "irrational exuberance" to quote Greenspan  

[Cryingdick]

5 minutes ago, sirineou said:

 All I can hope  is some "irrational exuberance" to quote Greenspan  

 

It's anybodies guess. i am out before the elections and certainly not doing another October  2020 leading up to them. 

[Longcut]

They are calling this “the Trump economy”, but that is simply not true.  And when Barack Obama was in the White House, it wasn’t “the Obama economy” either.  Ultimately, it is the Federal Reserve that is running the economy, and they fiercely guard their independence and their authority.

[Cryingdick]

9 minutes ago, Longcut said:

They are calling this “the Trump economy”, but that is simply not true.  And when Barack Obama was in the White House, it wasn’t “the Obama economy” either.  Ultimately, it is the Federal Reserve that is running the economy, and they fiercely guard their independence and their authority.

Exactly. Powell might have been right to raise rates and throw some red meat to the bears. However a lot of economists question the merit of him going on camera later and babbling on and on while the market crashed on his every word. There was absolutely no need to hold that press conference.

[puukao]

was worth 1 million, now worth 950,000 USD.  

 

If you are not rich, don't pay attention to this stuff.  if you are rich, be thankful and work on your health and mind.

 

these articles are for sheep.  

[metisdead]

A troll post has been removed.

[riclag]

8 hours ago, Cryingdick said:

 

That's not exactly true Almost every office worker in America has retirement plan that is at least somewhat based on stocks. The truly rich normally have access to inside information, a good knowledge of the market and most importantly a boat load of money.

 

i did very well last week by shorting a lot of companies. The market tanked and i was back out by final bell. It was actually one of the easiest weeks I have seen to predict the market would tank because of the FED meeting. 

 

That is how many rich people get richer and part of the reason the market can fall and people still continue to build and grow their wealth. i put some money into the market but by the end of the day I was taking money out. As a trader I only require three things to be successful volatility, volume and a catalyst. when i say volatility it doesn't matter to me if that is upward or downwards.  i can go long or short it's of no consequence to me. the volume so i can get the required momentum and a catalyst that let's me know which way a stock can move in a day. Many savvy traders just want the market to swing as widely as possible because that's when you find good set ups. 

 

So it isn't traders that trade based off of more than a hunch that lose.

 

The people I think that get hurt are senior citizens that three months ago had a great retirement egg and it has lost a lot of value. Now the choice is cash out now or wait and risk it getting worse.  Those people don't have another 20 years to wait on a sluggish market so have no choice but to cash out and realize those losses. The typical retail investor has long shares and buys and forgets about them so they get caught in the steam rollers.

 

The ultra wealthy have strategists that play the game. They may lose a bit right now but when we consider what a guy like Buffett or any other billionaire invertor has done it is clearly the rich that do not lose money.  They have the knowledge, strategists and money to take advantage of volatility in ways the mere mortal can't. A guy like Buffett would look at least week and identify opportunities. As he has famously says get greedy when others are fearful. He was saying a few months ago it was hard finding good buys, that isn't the case now. He took a huge share of Apple and right now is down a ton of money. i bet he simply takes  a few billion more and buys again averaging his cost down by a fortune. With that kind of volume there are also dividends that are basically free money while you wait.

 

The only people that lost any money last week or people that got scared and sold or had to sell because they are really old and can't risk waiting. For the traders, the ultra rich and corporations it's just another day on Wall street. 

 

More people in the USA have money in the markets than at any point in history. So before you take too much glee in your schadenfreude you are actually taking pleasure in that old Grandpa that bought Apple because it's a 'solid' company. Zuckerberg didn't lose money even though FB got hit hard. He is billions upon billions of dollars ahead. He has repeatedly sold stock ahead of news that drives the stock down and has billions of realized gains. His 'losses' are unrealized and don't matter. 

 

The article you post is useful in the sense that it makes poor people feel better knowing the big guy got hurt but in the long run that never happens.

 

That was a lot longer than I intended.

 

TLDR

 

It's the retired guy living in a shoe box condo in Thailand that is more likely to be hurt. The condo won't move, health costs are going up and inflation  on the rise.

 

 

These are the type of people that sell under duress. The rich are the ones that come in and buy their losses.

 

 

 

 

 

 

 

 Nov 5, 18 article  "Trump Says the Stock Market Will Crash if Democrats Win. Is He Right"?

https://www.barrons.com/articles/midterm-advice-tune-out-the-political-noise-stick-with-stocks-1541194440

If your 401k was heavy into high risk to moderately risk mutual fund stock sectors it would of been wise to start moving some of that( July/August) into a less profitable low risk sector,especially knowing that the infamous "October Effect" and the much criticized mid terms, where around the corner, breathing down the necks of baby boomers !