I Stand Corrected: Dow Plunges 530 Points, Now Officially a Correction
The
Dow Jones Industrial Average officially entered correction territory
this afternoon after dropping 530.81 points, or 3.1%, to 16,459.88 at
today. That means the Dow has now dropped 10.1% since its ...
Barrons.com
I Stand Corrected: Dow Plunges 530 Points, Now Officially a Correction
By Ben Levisohn
The Dow Jones Industrial Average officially entered correction territory this afternoon after dropping 530.81 points, or 3.1%, to 16,459.88 at today. That means the Dow has now dropped 10.1% since its May high, meeting the definition for a correction.- Reuters
This week alone, the S&P 500 lost $1.1 trillion of value. As S&P Dow Jones Indices’ Howard Silverblatt put it: “Ouch.”
Glenmede’s Jason Pride isn’t worried about a bear market yet:
Despite today’s big drop in the markets, looking “under the hood” of the economy still projects growth in the second half of 2015. Wall Street is using China as the most recent excuse for a correction, but the long-term expansion is in place. While there are hurdles along the way, the excesses that bring a long term correction aren’t there. In the near-term there may be increased volatility in the markets, but the full picture of the economy is still relatively sunny.InvesTech Research’s Jim Stack is quite concerned:
Let’s face it – the 800-pound gorilla in the room is hard to ignore. Even with the Dow Jones Industrial Average off over 1000 points from its May peak, no one wants to acknowledge the possibility that this bull market might have ended. It has been one of the most unrecognized and unloved bull markets in history…yet it has turned into the third longest and fourth most profitable bull market of the past 80 years!I’d prefer not to.
Investors find themselves in a vexing position with businesses doing extraordinarily well, yet profits lagging. Meanwhile, the conundrum facing the Federal Reserve has placed it in the most untenable position in decades. They must normalize (increase) interest rates – if for no other reason than to have ammunition to battle the next economic downturn or recession. And some data is showing the tightest labor market in 40 years. Yet strangely, wage inflation remains notably absent. And the collapse in oil prices, accompanying slide in commodity prices, and China’s devaluation of the yuan have seemingly ensured that inflation will remain below the Fed’s 2% target threshold for the foreseeable future. Imagine the fallout if Yellen & Co. raised interest rates and today’s sliding stock prices were a precursor to recession.
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