Dow Erases All Gains Since Trump Took Office

Mish

The DOW broke through a level first reached as Trump Took office.

Circuit Breakers Trigger Again

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For the second time in three days, Stock Market Volatility Triggers Kicked In.

An exchange-mandated circuit breaker halted trading for 15 minutes for the second time in three days after the S&P 500 fell 7% from its Tuesday close.

Trading will pause again if the index drops 13% during Wednesday’s session -- a drop of that magnitude would bring the S&P to 2,200.39. A 20% intra-day drop would see markets close for the remainder of the session.

Markets are trading again but the circuit breakers failed to stop the decline.

The DOW is down over 2000 points (9.4%) with the S&P 500 down 190 points (7.8%). The Nasdaq is down 533 points (7.2%).

You cannot blame Trump for the coronavirus unless you believe in conspiracy theories, but you can blame his handling of it and his arrogant Tweets in general.

Mike "Mish" Shedlock

Comments (46)
No. 1-17
Quatloo
Quatloo

I wonder if Obama will take credit for the Dow’s close today?!

Bam_Man
Bam_Man

Oil down almost 25% TODAY.

Unbelievable.

Casual_Observer
Casual_Observer

Next stop for the indices is the day after Trump was elected. I've always maintained Trump is toast if the economy goes south. It is not a matter of if anymore. Coronavirus isn't his fault but the adversarial trade relationship with China didn't help matters. China is still to blame for trying to cover up Covid-19 but Trump will also pay the price. I don't rule out a double digit negative GDP number for 3 quarters. (Q1,Q2 and Q3) going into election day in 2020. The economy will be back on it's feet in September but the population will be wary of OrangeMan.

Carl_R
Carl_R

Another day or so it will reach where it was when he was elected.

RayLopez
RayLopez

@CautiousObserver - I hope you're right. What's worrying me is this, which I also posted at the Community section:

Taleb et al paper (the only link on point IMO for a 'everything will be OK' scenario, https://necsi.edu/review-of-ferguson-et-al-impact-of-non-pharmaceutical-interventions): "The outbreak can be stopped completely with no resurgence as in China, where new cases were down to one yesterday, after excluding imported international travelers that are quarantined" (published March 17, 2020)

Today (March 18, 2020): "China has taken their best shot at stopping it cold, but they continue to report new cases, 39 today..."; or, if believe the site https://www.worldometers.info/coronavirus/ then China has 13 new cases.

So, either (1) China is negligent in stopping infected travelers into China (Taleb thesis), or (2) Covid-19 virus, SARS-CoV-2, is hard to kill, even after several weeks of quarantine.

Choose your priors. If it's (2), the Covid-19 becomes like the seasonal 'common cold' except it kills 33x more people than the seasonal flu. "Shelter-in-Place" and "social distancing" and "quarantine" for a long time, until they find a vaccine?

Casual_Observer
Casual_Observer

I also am not ruling out Trump resigning once he sees the handwriting on the wall. He won't risk losing an election if he has zero chance of winning. The ultimate joke on America would be if Trump fired himself. Don't it say it can't happen. Tom Brady left the New England Patriots and coronavirus happen. 6 months ago these predictions would have looked foolish.

hmk
hmk

Silver spot tanking and you cannot buy rounds, eagles or maple leafs. No physical supply available. WTF

Tony Bennett
Tony Bennett

DXY > 101

Federal Reserve will need to announce even bigger QE to 1) drive down $US and 2) to lower interest rates on long end of curve. Interest rates soaring are an uppercut to Housing.

When we get economic reports a month or two from now on current numbers they will be horrendous.

kpmyers
kpmyers

Blame the Fed (and the Presidents that appointed them) that created such a fragile credit market dependent on constant payments to service the debt. This just didn't happen overnight Greenspan (Clinton), Berknake (W. and Obama), Yellen (Obama) and Powell (Trump)...their fingerprints (Reserve Chairmen & Presidents) are all over this collapse/meltdown. Sadly, this 35+ years of Monetary mismanagement won't get the scrutiny it deserves, nor will those policy makers that were complicit in this debacle.

dlep
dlep

hi Mish, housing next?

lol
lol

Pretending works …...until it doesn't! Printing trillions and buying well...everything to prop them up and buy time works....until it doesn't.borrowing trillions to grow govt and create the illusion of growth works...until it doesn't!

Bohm-Bawerk
Bohm-Bawerk

When you keep triggering circuit breakers, you should unplug some things and move them around... Bonds again are dislocating, with long bonds down hard, something isn't clean in the world right now.
Stay safe everyone.
Just bought another tank of propane, there were plenty of tanks at my local Walgreens.

LarryK
LarryK

So here is the deal.... We all need to remember the malaise that the country was in with Obama. Hillary was a HORRIBLE candidate (and person) and we can only imagine what a mess todays life would be with her at the helm....with 2 or 3 supreme court picks no less.

I have to agree, Trump is a narcissist and megalomaniac. You kind of have to be to think you can be president....but he clearly took it to another level. At the time, we (the country) wanted to shake up the system....and boy did we. My thought on this whole CV19 deal..... If Trump would have come out right away, and explained how bad this could get....people would have rioted, and many may have been killed needlessly. I view this as a "boil the frog" strategy....which IMO, is probably best. Every day come out with a little more bad news, then a little more, etc....so it will be bad, but at least the country is basically primed for this.

As for the monetary system.....if this helicopter drop of $1-2K a month doesnt show how worthless the fed and this system is, we dont deserve to be in a capitalist country. Speaking of, I am going to write my senators and request that ANY company that borrowed or issued debt for a stock buyback in the last 7 years (or whatever) should NOT get a bailout. I mean really.....Boeing, who screwed the pooch with the 737MAX, AND issued $100B to buy back stock, wants a $60M bailout. Oh HELL no! Let them go BK, sell the company at auction, and clear this debt mountain out once and for all. This is going to be ugly, but I think the debtberg is more of a threat to our long term survival than CV19.

And really, what ever happened to keep a cash reserve (for individuals and business) in CASE there is an unexpected emergency like this? I know, lets hand out cash to the irresponsible and screw everyone. Nice

Tony Bennett
Tony Bennett

Mortgage rates.

Looking at Mortgage Daily News. Average fixed rate 30 yr mortgage. 52 week range 3.13% to 4.40%. Todays rate (set yesterday) 4.13% … following a 68 bps jump! Yesterday 3.45%. More ugliness on tap when updated after 4pm est.

bradw2k
bradw2k

Unfortunately @lol is finally right, this is the Great Reset. All measures of wealth cutting in half ... as a start.

Nice weather here, though.

moyerdere2
moyerdere2

Any guesses as to where this ends for the DOW or S&P? Stocks where highly overvalued before this, and maybe they are closer to fair value, but it will likely end up overshooting to the downside as well, so i think we need to go down much more as everyone realizes that the big "D" is unavoidable. Just a few days ago some where thinking a recession was avoidable, and I thought that was laughable, but i didn't think about a 20% drop in US economic activity, but now I think maybe that is possible. I can work from home, but my son lost his restaurant job, my brother in-law works in a band, and I figured any gigs he had recently are gone, but he said people are cancelling wedding gigs in AUGUST. I don't think we get V recovery, because this snowballs medically and financially. We are stuck at home for 2 months at least because too many people are not staying home and we will be experiencing what Italy is in 2 weeks. 10x the cases and deaths we have now. That maybe will cause the bottom, 1200 to 1600 on the S&P? I know that is a big range but we know things will get much worse, but my confidence level is low right now as too how bad it will eventually get. No one i know has experienced anything like this before.

Debbie C.
Debbie C.

Housing interest rates were @ 9 & 1/2 pts to buy 1978. I bought a home. & Then paid 9 1/2 + 1/4 then @ 9 3/4. I only wish my payments were that low now, compared to my apartment rent. I'm paying approx. $500 more a month now in appt, & it would have been paid off by now, but, everybody was in a hurry for me to sell as the "market for a husband" was slim to none, since, my age group was killed in the Vietnam war! Very difficult to keep up, a two story house. Family feud wasn't even close to the death threats I got for trying to sell it, & then after. They should have found me a true blue! That's all I can say .


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