Stock Market.. Not so good of a day
Stock market news: Dow plunges 1,861 points, or 7%, for worst day since mid-March
Stocks dropped by the most since mid-March on Thursday following the Federal Reserve’s monetary policy decision, in which policymakers highlighted the ongoing economic concerns spurred by the coronavirus pandemic and measures taken to contain it.
The Dow dropped 6.9%, or 1,861 points, for its worst day since March 16. The decline marked the fourth biggest point-drop for the Dow on record. The VIX Volatility Index (^VIX), or so-called fear gauge, spiked more than 50%.
“What we’re seeing here is the market taking a breather,” Alex Piré, Seeyond Head of Client Portfolio Management, told Yahoo Finance on Thursday. He cited relatively bearish remarks from Fed Chairman Jerome Powell as partly responsible for telling investors “what the market wouldn’t like to hear. But the economic news that we’re getting has stayed fairly consistent.”
Additionally, market participants eyed a rise in new coronavirus cases in key states including Arizona, Florida, North Carolina and Texas. Meanwhile, the Labor Department’s weekly report showed another 1.542 million individuals filed new unemployment insurance claims for the week ended June 6, coming down slightly from the prior week’s 1.897 million.
Shares of companies viewed as some of the most set to benefit from easing social distancing measures posted another session of steep declines. Airlines American Airlines (AAL), United Airlines (UAL) and Delta (DAL) each dropped by more than 14% Thursday. Cruise companies Carnival (CCL), Royal Caribbean (RCL) and Norwegian Cruise Line Holdings (NCLH), along with lodging firms Wynn (WYNN) and Hilton (HLT), posted their third consecutive down days.
Zoom Video Communications (ZM) was one of the few gainers, rising by about half a percent. Grubhub (GRUB) shares rose 4.7% after European food delivery platform Just Eat Takeaway announced it was set to acquire the company.
A day earlier, the Federal Open Market Committee’s (FOMC) Summary of Economic Projections indicated the Fed expects a steep 6.5% contraction in real GDP in 2020, with an unemployment rate at 9.3%. However, policymakers expect real GDP to rebound by 5.0% in 2021, with the unemployment rate dropping to 6.5%.
In its monetary policy decision, the Fed projected interest rates would remain near zero through 2022 and telegraphed that its pace of asset purchases would remain at minimum at the current rate.
The decision to keep rates on hold for the foreseeable future given the virus-induced economic damage was widely expected by market participants. And while the Fed stopped short of unveiling yield curve control strategies, as some had speculated would be the case for the central bank to put a cap on longer-term rates, Powell did suggest the FOMC would continue discussing the mechanism going forward.
“Even though [yesterday’s] FOMC meeting was somewhat of a placeholder until more meaningful choices are made in the next few meetings, the outcome was dovish nonetheless,” JPMorgan economist Michael Feroli said in a note. “The Fed kept interest rates steady and the accompanying interest rate forecast ‘dots’ indicate that rates are likely to remain pinned near zero for at least the next two-and-a-half years.
“Moreover, there was unusual unanimity in this expectation as only two participants expect any rate hikes by that time,” he added. “While the dots are individual forecasts, and not a Committee statement, the unusual lack of dispersion in those dots means it should be easier for the Committee to agree to more forceful forward guidance at upcoming meetings.”
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4:05 p.m. ET: Dow drops 1,861 points in fourth biggest point loss ever
Here were the main moves in markets as of 4:05 p.m. ET:
S&P 500 (^GSPC): -188.04 (-5.89%) to 3,002.10
Dow (^DJI): -1,861.82 (-6.90%) to 25,128.17
Nasdaq (^IXIC): -527.62 (-5.27%) to 9,492.73
Crude (CL=F): -$3.42 (-8.64%) to $36.18 a barrel
Gold (GC=F): +$13.40 (+0.78%) to $1,734.10 per ounce
10-year Treasury (^TNX): -9.5 bps to yield 0.6530%
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Stocks have a tendency to go up and go down. Don 9 -
It came back after the first drops due to COVID and it will rebound again. It is a market that is very volatile because of the fast flow of information in modern times. None of these fluctuations can be compared to the drop before the Great Depression.....Information flowed at a snail pace back then. 0 -
A burp that was inevitable. Dumped the balance of my index funds this past Thursday. Should have waited until Friday, but was blindsided by the May jobs report. Put about 20% back in at the close today. If tomorrow is another downer, will do the same.
Large fluctuations have allowed me to return to positive in my play account since the big dump. If the next week or two does what the markets were doing in March, there is money to be made if you are willing to throw the dice.0 -
Fed money is still there it will bounce around until after the election, than who knows?! 0 -
I have limit buys set and will look again in the wee hours to add more. Should have walked further out on the limb couple of months ago. I'm inching my way out toward the end again.
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After hours trading DOW is up 146 and climbing, S&P is up 15 plus, so tomorrow will be an interesting day. I'm set to buy more while the price is good on some issues. 0 -
I liked it, put another $10K in the stock fund. 0 -
I like it too! Goes to show you That when the Feds buy all the debt of the funny money they must churn the market to erase some. The protesters spike is coming from The Wuhan virus soon and this spike was the Memorial Day bump . I wonder what The M-3 money supply looks like now? We will never know?
serf
https://inflationdata.com/articles/2006/03/16/goodbye-m3-what-is-the-government-hiding/Discontinuance of M3On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.
But that is all small potatoes, M3 includes all of M2 (which includes M1) plus large-denomination ($100,000 or more) time deposits, balances in institutional money funds, repurchase liabilities issued by depository institutions, and Eurodollars held by U.S. residents at foreign branches of U.S. banks and at all banks in the United Kingdom and Canada.”
In other words, M3 tracks what the big boys are doing with the money. This includes US dollars held in banks in Canada and the UK (called Eurodollars) not to be confused with the Euro which is the standard currency of Europe.
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Dow is up over 600 today. I've place my order, market scheduled to open in 15 min. We will see what we will see. 0
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