Friends

It was another dramatic day for the markets. Stocks plummeted once again as market participants are selling first and asking questions later. Will all this descend into a worldwide trade war? Will all of this cause a global recession? Investors are selling stocks as if the definitive answer is yes. Indeed, if recession is in our near future, then stock prices had to be rerated. Of course nothing is certain at this point. This morning’s jobs report was actually hotter than expected. Unfortunately, I’m not sure the good jobs number was a good thing for stocks. As Chair Powell said today, he will not succumb to any pressure from the White House with regards to lowering interest rates (moments earlier the President urged him to lower rates). Given the strong jobs number, he has a point. So, it appears that the Fed is not going to ride to the market’s rescue at the moment.

The speed of the collapse this week has been alarming, but not surprising. We move quickly nowadays. As for today, by the close the Dow Jones Industrial Average was down 2,231 points to finish the day at 38,314. The S&P 500 was down 322 points to close at 5,074. The Nasdaq Composite was down 962 points to close at 15,587. Gold was down $71 to trade at $3,049 per ounce, while oil was down $4.16 to trade at $62.79 per barrel WTI.

The market averages are quickly approaching bear market territory (down 20%). It will be interesting to see how much resolve the President has. I’ve mentioned the deterioration of the wealth effect, not to mention consumer and investor sentiment. There could be a lot of damage being done at the moment. We will surely find out.

We will discuss all of this on Monday if you can join us for the zoom call. We sent out a link earlier and will again on Monday morning. In the meantime, the great Art Cashin would say going into the weekend after a week like this- the ice cubes don’t stand a chance.

Have a great weekend everyone.

Jim