Stock Market Erases All Gains of 2019

Mish

The S&P 500 rose almost 29% in 2019. Today those gains were erased this morning but now stocks are off the lows.

Bloomberg reports One of the Best Years of the Bull Market Was Just Erased in S&P

The S&P 500 rose almost 29% over the course of 2019, good for the second-best year of the bull market. It took a little under four weeks to fall apart.

A rout that reached 11% on Monday briefly pushed the benchmark to 2,402, below its level of two New Years ago. Even after paring the decline at midday stocks were down more than 20% this year.

Extreme investor anxiety was on display on Monday after the second emergency Federal Reserve cut in two weeks proved too little to comfort investors obsessed with the coronavirus and its effect on the economy. The CBOE Volatility Index, known as the fear gauge, jumped as high as 76.4, just shy of its highest level since the 2008 financial crisis.

Not only was 2019 erased, at least momentarily, the entire rally since Trump took office is at risk.

Mike "Mish" Shedlock

Comments (24)
No. 1-10
Casual_Observer
Casual_Observer

I made 28% on Bonds in 2019. My bonds continue to outperform my stock portfolio which got moved to 75% cash a few weeks ago. My forecast is Dow 15000 and S&P 2000 when this is all said and done. The Fed can set rates to 0 instead of a range and still get rates lower. The treasury could issue a statement on the 10 year bond and move it lower as well. It hasn't been tracking the Fed cuts very well. Banks will be made whole but the recession will be deep. GS is forecasting -5% GDP.

killben
killben

One more term and I will make the stock market great again.

aqualech
aqualech

So disappointing. So many level-headed people warned of the danger for so long (Hussman! lol). All these people who rode the market up for the last 10 years now seem to be calling for the end of free markets.

lol
lol

After moar than a decade of simply printing hundreds of trillions of dollars and using it to buy stocks covertly has all but petered out, the Fed has gone full blown Kamikaze and is hell bent on "printing " the "market" back to records highs while the underlying (private sector) economy has virtually (permanently) collapsed on it's ass shows how desperate and delusional CB's have become.

Buzzbombs
Buzzbombs

Oh no, the poor "investors" being treated like savers for one year out of last 11. The entitlement mentality the fed created with moral hazard is staggering.

Tony Bennett
Tony Bennett

The big news out this weekend that may have gotten lost in the shuffle. The big banks foregoing stock buybacks. If they pull back, I imagine most other large corps do the same. Cash at a premium and doubt business would expend their credit lines on buybacks. The optics would be poor and banks would probably yank them if it became trend.

KidHorn
KidHorn

The market may fall further, but once the coast is clear, there's going to be a hell of a rebound. I suspect oil will be over $60 before years end.

mark0f0
mark0f0

That's all of a drop?

Jojo
Jojo

A couple of people I spoke to recently are echoing CNBC whining anchors and calling for the markets to close for 2 weeks. Markets are not supposed to decline after all, yes?

AshH
AshH

After today, we're back to just above the 5/15/17 close on the S&P500. Another 9.3% drop (to about 2164) wipes out the entire Trump bull run since election day.


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