Tag: S&P 500 (CME:SP500)

The Coronavirus originated in and hit China first, so it should be expected that the Chinese economy could be used and will be used as a predictor for the U.S. economy moving forward. After all, we are talking about the two largest economies in the world.

Since the mid-1970s, the Chinese economy has had more than four decades of unbroken gains, an incredible run, increasing its domestic economy by roughly a hundredfold and transforming the global economy in the process.

But that winning streak came to a sudden and shocking end Friday. China reported a -6.8% year-over-year contraction in its economy for the first three months of 2020. That's the first quarterly decline in the gross domestic product since official record-keeping began in 1992 and likely the first since Mao Zedong died in 1976.

That should be quite a warning to the U.S., especially after U.S. retail sales Continue reading "Is The Chinese Economy A Predictor For The U.S.?" →

The question I keep asking myself is this, how long will this bear market rally last, and yes, I still think this is a bear market rally. There are zero reasons that the market was up for the week and especially for how much it was up. The DOW and S&P 500 both gained a whopping +12 on the week with the S&P 500 having its biggest one-week gain since 1974 when it gained +14%. The NASDAQ brought up the rear with a +10% gain, having it's best week since 2009. But why?

Two reasons really, the Fed and a flattening curve of the Coronavirus pandemic.

This week the Fed announced as a large number of programs, including loans geared towards small and medium-sized businesses, that will total up to $2.3 trillion. They also gave more details on its plans to buy investment-grade and junk bonds going forward.

As for the Coronavirus, the number of new daily confirmed cases has dropped globally. In the U.S. New York state has also reported a decline in its virus-related hospitalization rate, which led the markets and trader sentiment to believe that we are turning the corner, but are we? Continue reading "Can This Bear Market Rally Last?" →

As we head into afternoon trading to end the week, the stock market is trading at or near the lows of the day after U.S. jobs fell by 701,000 in March, marking the worst jobs report since 2009, while the unemployment rate jumped to 4.4%. However, the report failed to capture the full extent of the economic blow being dealt with by the coronavirus outbreak. On Thursday, the Labor Department said jobless claims jumped by a record of 6.6 million for the week of March 27.

The DOW has been down over -2.5% on the day, with the S&P 500 losing -2.3% and the NASDAQ losing roughly -2.4%. After a brief mid-week bear market rally last week, the overall long-term downtrend has returned this week with the market posting a losing week, it's third in the previous four weeks.

The DOW will post a weekly loss over two percent at -3.3%, the S&P 500 checks in with a weekly loss of -2.5%, and the NASDAQ brings up the rear with a weekly loss of -2% as well. Continue reading "Loss Of Jobs Weighs Heavy On The Market" →

Stocks are ending the week on a sour note after experiencing a three-day rally mid-week that saw the three major indexes gain upwards of +13%. But was this a bear market rally? Or can the upward momentum continue?

What is a bear market rally, you ask? A bear market rally is a sharp short-term increase over days to weeks within a longer-term bear market. Often investors will see this short rally and think that a bottom has been put in and that the bear market is over. However, investors should be cautious as the downward market action will often return, catching investors out.

You may know these rallies by other names such as a "Sucker Rally" or a "Dead Cat Bounce."

The bear market rallies that began in 2000 and 2007 both gained more than 20% before coming to an end. The most massive bear market rally came Continue reading "Was This A Bear Market Rally?" →