atans1

Black Friday for equities

In Financial competency on 11/03/2019 at 9:44 am

Juz that no-one noticed it. LOL

The Dow Jones Transportation Average — one of Wall Street’s favourite barometers of economic activity — has fallen for a record 11 consecutive sessions. Many investors, self included, regard its performance as a predictor of growth because it’s made up of of railroad operators, shipping companies and airlines that ship physical goods around the world. On Thursday, it fell for a record-equalling 10th straight session.

And indices including the S&P 500, Nasdaq Composite and FTSE All World all closed below their 200-day moving averages, seen by traders as long-term support levels.

That’s not all: the strength of dollar despite Fed turning chicken on interest rates shows that the other major economies look sick. And strong US dollar is bad for emerging markets.

The gd news is that S&P 5000 fell every day last week for a cumulative drop of about 2.4%  That would rank as its worst weekly performance since December 21, just before the market bottomed.

 

  1. Catalyst was on Thursday lah! ECB capitulation.

  2. I almost wanted to buy some stocks on Fri, but changed my mind as still not cheap enough. Since I’m already quite overweight in equities, will wait for steeper corrections to load up.

    The US jobs report I feel actually shows underlying strength in US economy, ignoring the headline 20K number which was prob due to one-off external factors.

    If there’s no nice US-China deal, likely we’ll get subpar global growth at best, and a relatively shallow global recession at worst. Sure, small open trade-dependent countries like S’pore will kena some severe whacking, but if you have global investable universe, then there will still be plenty of good income & growth assets.

    If you have another 10-15 years timeframe though, then anytime now is good to be in equities. As usual if you need to touch your money within 5 years, don’t put them in risk assets.

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