The major U.S. stock markets jumped out of the gate on Wednesday after a few days of gloom that dragged them to what is shaping up to be their worst December performance ever, but then sagged as the opening frenzy died down.
Wednesday’s trading could mark the end of the longest so-called bull run in Wall Street history.
The broad-based Standard & Poor’s 500 index is on the verge of entering a bear market, defined as a 20 per cent drop from its peak value.
The S&P 500 hit a peak of 2930.75 on Sept. 20, but going into Wednesday’s trading, it was off 19.8 per cent from that high point, and needed to close down just seven more points to be in bear territory.
The current U.S. bull market — a run-up in stocks free without any declines of 20 per cent or more — began in March 9, 2009, and became the longest ever as of Aug. 22.
In that time, the S&P 500 quadrupled, the Dow Jones Industrial Average did almost as well, and the tech-laden Nasdaq index climbed 500 per cent, before starting their current declines.
Abysmal December
Canada’s TSX index, closed for trading Wednesday due to the Boxing Day holiday, is down 16.8 per cent from its all-time high, set in July. It hasn’t soared nearly as much as the major U.S. indexes during the current bull market because it was held back by the oil price collapse in 2015.
Global stock markets have been suffering an abysmal December. Markets in Hong Kong, Japan, France, Britain, Brazil and Mexico are all down for the month.
Markets have been jittery in recent days since reports that U.S. President Donald Trump, left, was discussing firing U.S. Federal Reserve chair Jerome Powell, right. (Carlos Barria/Reuters)
If current levels hold, it would be the worst December on record for the major U.S. markets, despite generally strong economic fundamentals.
“The outsized moves are not reflective of the current U.S. economic landscape, but that seems to matter little so far as fear mongering continues to permeate every pocket of global capital markets,” Stephen Innes of OANDA, a currency trading platform, said in a market commentary.
Stocks have fallen sharply in recent days since U.S. President Donald Trump lashed out at his own central bank, which has hiked its key interest rate four times this year, most recently last week.
Trump administration officials spent the weekend trying to assure jittery financial markets that U.S. Federal Reserve chair Jerome Powell’s job was safe. On Tuesday, Trump reiterated his view that the Federal Reserve is raising interest rates too fast, but called the independent agency’s rate hikes a “form of safety” for an economy doing well.
Trump has also reportedly been upset over the last week with his treasury secretary, Steven Mnuchin, who advised him to appoint Powell to the Fed job.
from Update Trend News http://bit.ly/2EPwABz
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