Dow drop 2/2/2018
Really not a big drop considering the Dow was over 26,000. Only about 2.5% or so. I see the bull continuing to run in 2018 after maybe a little more to the downside.
From the Washington Post:
Thomas Heath, reporter
Dow drops 666 points and posts its worst week since 2016
The Dow Jones industrial average plunged 2.5 percent — closing down 666 points — Friday and suffering its worst week in two years as concerns over rising interest rates and inflation from an overheated economy caused a long-feared sell-off.
It was the worst day for stocks since President Trump took office. The retreat was a reversal from the bullish sentiment that has defined the markets for most of the past year. The stock market has been on a historic nine-year bull run.
All indexes were down Friday, with the tech-heavy Nasdaq falling 1.3 percent and the Standard and Poor’s 500-stock index down 1.6 percent.
The yield on the key 10-year Treasury spooked markets by reaching new highs at 2.84 percent. The 3 percent yield is looked at as a key threshold that can drive investors out of equities and into bonds.
The market drop came on a day when reports on increasing wages and tightening labor markets sent fears that interest rates will rise. The Commerce Department reported Friday that factory orders rose 6 percent last year, the measure’s best percentage increase since 2011.
The U.S. and world economies are so strong that people think the good times cannot last. Wall Street watchers are worried that the Federal Reserve under new chairman Jay Powell may overreact and boost rates, bringing the market run to a hard halt and slowing the U.S. economy.
“Rates are rising today specifically on the very good jobs numbers for January, and more importantly you have seen wage growth pop up to 2.9 percent year over year, which is a notable acceleration,” said Jeffrey Schulze, an investment strategist at ClearBridge Investments.
“It means you are going to see an inflation picture continuing to firm and strenghten over the course of 2018, which will drive 10-year Treasury yields higher and cause the Fed to reconsider its gradual pace of tightening,” Schulze said.
Friday’s retreat came two days after the market finished a powerhouse January, closing its best month in almost two years and the Dow up 5.8 percent to start the year.
Markets have turned more volatile after a relatively quiet 2017 and first month of 2018. Friday’s drop follows a big pullback earlier in the week, led downward by health-care stocks. Wall Street observers have continued to number of culprits conspiring against the bull market, including investors taking some chips off the table.
Dow drop 2/2/2018
Really not a big drop considering the Dow was over 26,000. Only about 2.5% or so. I see the bull continuing to run in 2018 after maybe a little more to the downside.
From the Washington Post:
Thomas Heath, reporter
Dow drops 666 points and posts its worst week since 2016
The Dow Jones industrial average plunged 2.5 percent — closing down 666 points — Friday and suffering its worst week in two years as concerns over rising interest rates and inflation from an overheated economy caused a long-feared sell-off.
It was the worst day for stocks since President Trump took office. The retreat was a reversal from the bullish sentiment that has defined the markets for most of the past year. The stock market has been on a historic nine-year bull run.
All indexes were down Friday, with the tech-heavy Nasdaq falling 1.3 percent and the Standard and Poor’s 500-stock index down 1.6 percent.
The yield on the key 10-year Treasury spooked markets by reaching new highs at 2.84 percent. The 3 percent yield is looked at as a key threshold that can drive investors out of equities and into bonds.
The market drop came on a day when reports on increasing wages and tightening labor markets sent fears that interest rates will rise. The Commerce Department reported Friday that factory orders rose 6 percent last year, the measure’s best percentage increase since 2011.
The U.S. and world economies are so strong that people think the good times cannot last. Wall Street watchers are worried that the Federal Reserve under new chairman Jay Powell may overreact and boost rates, bringing the market run to a hard halt and slowing the U.S. economy.
“Rates are rising today specifically on the very good jobs numbers for January, and more importantly you have seen wage growth pop up to 2.9 percent year over year, which is a notable acceleration,” said Jeffrey Schulze, an investment strategist at ClearBridge Investments.
“It means you are going to see an inflation picture continuing to firm and strenghten over the course of 2018, which will drive 10-year Treasury yields higher and cause the Fed to reconsider its gradual pace of tightening,” Schulze said.
Friday’s retreat came two days after the market finished a powerhouse January, closing its best month in almost two years and the Dow up 5.8 percent to start the year.
Markets have turned more volatile after a relatively quiet 2017 and first month of 2018. Friday’s drop follows a big pullback earlier in the week, led downward by health-care stocks. Wall Street observers have continued to number of culprits conspiring against the bull market, including investors taking some chips off the table.