Turmoil in the stock markets
- Author: Zachary Reyes Feb 09, 2018,
Feb 09, 2018, 11:00
Monday's decline of 1,175 points on the Dow was, by far, the biggest point decline in history.
The Dow Jones Industrial Average fell by more than 1,000 points for the second time this week, plunging 4.15% to 23,860.
Finally, there's one more way I looked at it.
"There's no question that the level of risk in buying the dip from this point forward is going to be higher than it was through any time last year and really even a year before that", said Randy Frederick, vice president of trading & derivatives at Charles Schwab.
As we have heard in the news, the market is in a major sell-off.
"I believe the market is going to fluctuate."
"Now that everybody is on edge, you're going to see the volatility swing in both directions".
The financial, energy and industrial sectors were among the biggest losers in the U.S. Lots of market analysts and investors feared that the market had become overvalued. European markets were also lower after the Bank of England said it could raise interest rates in the coming months.
The usual explanation that the market fears a rise in bond yields can't be all, nor indeed most of the story. If bond yields start to rise, investors will want to take some of their money out of stocks and put it into safer bonds. Silver rose 10 cents, or 0.6 percent, to $16.34 an ounce, and copper fell a penny to $3.08 a pound. That raised the alarm about higher inflation and, with it, potentially higher interest rates. But Kotok says it's hard to answer that question because there are several open seats on the Fed's governing board, and there's no way to know the views of the people who will ultimately fill those seats.
The tax law makes it easier for U.S. companies that earn profit outside of the United States, to bring the money back to the USA to invest.
Economic data showed weekly jobless claims fell to 221,000 below the 232,000 rise expected by economists, dropping to its lowest level in almost 45 years as the labor market tightened further.
In Toronto, the S&P/TSX composite index was down 264.97 points, or 1.73 per cent, to 15,065.61, in a broad-based decline.
It had also lost four per cent last week, marking its worst weekly decline since January 2016. Benchmark US crude dropped US$1.60, or 2.5 per cent, to US$61.79 a barrel in NY.
On Black Monday in 1987, the Dow dropped an incredible 22%.
After regular cash trading, S&P 500 e-mini futures edged down 0.2 per cent late on Thursday.
And worryingly, the futures market is suggesting that USA stocks could fall back later today.
"Global central banks continue to diversify into the Canadian dollar".
While the market failed to hold on to the early gains, the mood has calmed significantly. That's also a big change: The market has been stable in the a year ago because every time it inched lower, investors swooped in looking for bargains and soon sent them higher again. Wall Street has been expecting three rate hikes at most.
The broad-based S&P 500 dropped 100 points or 3.75%, and the tech-rich Nasdaq was down 3.9%.
Snap, the parent of Snapchat, the disappearing-message application, rose US$6.76, or 48 per cent, to US$20.82 after it reported strong user growth and greater-than-expected revenue in the fourth quarter. That should please shareholders, until they remember that the blue-chip index shed nearly 200 points on Tuesday, hitting a 10-month low.