Monday, January 18, 2016

U.S. stocks clobbered; Dow drops almost 400 points........

U.S. stocks clobbered; Dow drops almost 400 points.

The Dow Jones Industrial Average was briefly down as much as 537 points.

Stocks post worst 10-day start to the year in history.

S&P 500 breaks below August lows. The S&P 500 broke below its Aug. 24 low—which is tantamount to a major sell signal—to trade at its lowest level since October 2014.

All Dow components were in the red, as were all 10 sectors on the S&P 500 were down.

The Dow slumped 390.97 points, or 2.4%, to 15,988.08, while the S&P 500 slid 44.85 points, or 2.3%, to 1,876.99, led lower by the financial, technology and energy sectors. The Nasdaq Composite tumbled 126.59 points, or 2.7%, to 4,488.42.

The Dow has lost almost 1,400 points so far in the first 10 trading days of 2016, on track for its worst monthly performance since February 2009.

Both the Dow and S&P 500 finished the week down more than 2%, while the Nasdaq shed more than 3% of its value this week.

The S&P 500 index is off almost 8% so far this year.

The Nasdaq has dropped 10%.

Europe's Stoxx 600 Index and China's Shanghai Composite Index both entered bear market territory, down 20% off their highs.

The one major missing ingredient to this ugly, nasty start to the year has been panic. Aggressive, unadulterated selling that results from primal fear of losses.

The carnage in commodities is virtually unprecedented?

The junk bond, leveraged loan, and convertible bond markets are reeling?

Emerging-market currencies are plunging at some of the fastest rates ever, and in some cases, to the lowest levels ever?

Corporate earnings are disappointing, and key sectors like autos, banks and tech are now in serious danger?

More and more corners of the global economy, including China, are slipping into or close to recession?

In spite of all of the above the VIX hasn't really soared (yet) and we haven't (yet) really seen huge "risk off" moves yet. The worst is yet to come.

Ultimately the anxiety-ridden market -- which, is, by the way, impacting not just equities, but commodities, bonds and currencies, as well -- reflects investors' concerns about global growth.

Markets will be closed in the US on Monday, though markets abroad and futures markets will be open, so unfortunately this isn't likely to be a long, relaxing weekend for US investors. In fact, it will probably be neither.

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