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US Equities in Trouble? Worst Daily Points Drop in History for DOW

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posted on Feb, 5 2018 @ 02:34 PM
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I foresee trouble in US equities if they continue to slide... some of you may recall this thread I made on Tuesday:

Bumpy Ride Ahead? US Stocks Finally Down - DOW Down 360+ Points

Today's drop is much more significant - you can see the DOW took a fairly steep dive shortly after 3 PM, NY time: www.marketwatch.com...

The VIX (Wall Street's "Fear Gauge") spiked to up to 35.73 at one point - it was as low as 8.56 a few months ago. This is telling...VIX

Computer algorithmic trades allow for thousands of trades to occur within a few seconds. Small key words or events that are mentioned in the news can cause major fluctuations in certain indexes or stocks. Before the weekend, the Federal Reserve capped Wells Fargo's size, declaring that the financial institution would not be allowed to grow any larger than their size at the end of last year, which stood at $2 trillion in assets. To me,
this was just a distraction to try and lay blame on one bank, for behavior that has been exhibited by nearly all (if not every one) of these financial monsters.
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Dow drops more than 1,500 points as stock slide deepens



By 3:08 p.m. ET, the Dow Jones industrial average had fallen 1,032.95 points — or 4 percent — to 24,488.01. The S&P 500 fell 59.63 points, to 2,702.31, and the Nasdaq fell 230.51 points, to 7,010.41.

Moments later, the Dow fell as much as 1,500 points and had erased its gains for the year. But for all the red across the charts, Wall Street analysts tried to quell worries.


US Treasury Yields continue to rise, inflation is picking up, and the overinflated stock market may continue to pull back as the market tries to find a balance.

A 10 to 15% correction would probably be good for this overinflated market - we are overdue for a pullback. But there is fear of "market contagion" as well: www.bloomberg.com...

Currently, it would appear that the Plunge Protection Team (PPT) has come in to prevent the market from deflating anymore. How long can they keep this thing propped up is my question?
edit on 5-2-2018 by FamCore because: (no reason given)




posted on Feb, 5 2018 @ 02:45 PM
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This might just be the beginning, I have a feeling things will only get worse from here on out. No proof or evIdence, just a feeling. Now watch the news the next few days, let's see how many distractions they throw our way.



posted on Feb, 5 2018 @ 02:55 PM
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The stock market is a gambling joint. Trump and his promises brought the gamblers out in full force. They bet heavy and the Stocks skyrocketed. Now it appears that the gamblers in the stock market no longer find his agenda to be a worthy gamble.

Trump took credit for the positive stock market. Will he now take credit for it this fall? Anyone want to bet?



posted on Feb, 5 2018 @ 02:57 PM
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The dow needs to have some air let out... It will be interesting to see what happens with bond yields though. As rates rise, it could choke off some of the growth as borrowing gets more expensive. The Fed kept ZIRP way too long and I believe they'd painted themselves into a corner.

Rates rising would put pressure on housing values... although the good news is that the housing market isn't nearly as vulnerable as it was previously as underwriting has been a lot more thorough.

There is a lot of money floating around chasing yield which is why equities have been doing so well. No where else to put money if you want any kind of decent return.



posted on Feb, 5 2018 @ 02:59 PM
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a reply to: TerryMcGuire

He should wait and see.

It's still President Obama's economy until at least September right?



posted on Feb, 5 2018 @ 03:01 PM
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a reply to: 200Plus

And Obama inherited the mess that Bush Junior and that republican government left lying in a shambles. So what does that mean.



posted on Feb, 5 2018 @ 03:02 PM
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originally posted by: FamCore
US Treasury Yields continue to rise, inflation is picking up, and the overinflated stock market may continue to pull back as the market tries to find a balance.

A 10 to 15% correction would probably be good for this overinflated market - we are overdue for a pullback. But there is fear of "market contagion" as well: www.bloomberg.com...

Currently, it would appear that the Plunge Protection Team (PPT) has come in to prevent the market from deflating anymore. How long can they keep this thing propped up is my question?


I heard an even bigger correction was needed, too much overvaluation of industries, especially those big concerns who have a way to go in playing catchup in new tech compared to overseas markets..if they can only produce so mutch at any given time, then they can't become any more profitable than they already are, and that then leads on to the other problem of labour forces, which can only get smaller.
Even the service sector, which is not a huge employer per se is becoming even more automated. It's a big problem, and a big problem for everyone.



posted on Feb, 5 2018 @ 03:03 PM
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a reply to: Edumakated

Yah supposedly they need a 4% drop in the prime rate to provide more 'stimulus'. But the 'stimulus' is for more asset price inflation, it doesn't do anything for the real economy.

All the inflation the fed creates just flows into asset prices, stocks, bonds or real estate. Supposedly wages raised a bit in the past quarter but I personally don't think that's a sustainable trend.

So they'll raise the prime rate up to about 4% then they'll drop it back down to zero and maybe go negative rates. That's what I fear because if they go into negative rates they'll have to ban cash. Which is probably what the banks want anyway so they can charge everyone 6-8% on every single transaction, deposit or purchase.



posted on Feb, 5 2018 @ 03:04 PM
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a reply to: TerryMcGuire

They all inherited the mess from LBJ and Nixon's administrations that ended the gold standard internationally. We'll see if this final bubble bust cycle leads to the death of the dollar, if so this depression will last at least 20 years while the real economy re-organizes.



posted on Feb, 5 2018 @ 03:06 PM
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originally posted by: FamCore
Worst Daily Drop in History for DOW


Of course they used a sensational title that is not entirely accurate. The '87 drop was 5 times worse than this percentage-wise which is what people should focus on, not the overall Dow number. The larger the number gets over time the more these large flucuations will become 'records'.






edit on 5-2-2018 by AugustusMasonicus because: networkdude has no beer



posted on Feb, 5 2018 @ 03:08 PM
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originally posted by: SkeptiSchism
We'll see if this final bubble bust cycle leads to the death of the dollar, if so this depression will last at least 20 years while the real economy re-organizes.


This is a blip on the radar compared to the worst drops. Hell, it doesn't even crack the top 20.



posted on Feb, 5 2018 @ 04:28 PM
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I heard the Fed put the breaks on the bear market?



posted on Feb, 5 2018 @ 04:37 PM
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originally posted by: AugustusMasonicus

originally posted by: SkeptiSchism
We'll see if this final bubble bust cycle leads to the death of the dollar, if so this depression will last at least 20 years while the real economy re-organizes.


This is a blip on the radar compared to the worst drops. Hell, it doesn't even crack the top 20.


Better check your link again. Today was the #1 largest point drop. Maybe you posted before it was updated?



posted on Feb, 5 2018 @ 04:44 PM
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originally posted by: AnonymousCitizen

originally posted by: AugustusMasonicus

originally posted by: SkeptiSchism
We'll see if this final bubble bust cycle leads to the death of the dollar, if so this depression will last at least 20 years while the real economy re-organizes.


This is a blip on the radar compared to the worst drops. Hell, it doesn't even crack the top 20.


Better check your link again. Today was the #1 largest point drop. Maybe you posted before it was updated?


Dow is at 26000. You have to look at percentage drops...

If Dow is at 7000 and loses 1000 it is a BAD. 1500 off 26000 isn't the same magnitude even though it is a larger point drop.



posted on Feb, 5 2018 @ 04:45 PM
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a reply to: 200Plus

Really? How does that work?



posted on Feb, 5 2018 @ 04:46 PM
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originally posted by: AnonymousCitizen
Better check your link again. Today was the #1 largest point drop. Maybe you posted before it was updated?


I said percentage drop. Scroll down.



posted on Feb, 5 2018 @ 05:41 PM
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What do people here think is the cause...

Fear of inflation, and the Fed raising rates, or something deeper ?



posted on Feb, 5 2018 @ 05:50 PM
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off-topic post removed to prevent thread-drift


 



posted on Feb, 5 2018 @ 05:52 PM
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I wonder will Trump bash his Fed pick if he does things that Trump dislikes like raising rates.



posted on Feb, 5 2018 @ 06:18 PM
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This could just be a long over due correction or at worst we could be burning furniture for heat and eating our pets before it's over.



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