The stock market’s early rally didn’t last long on Friday, as the S&P 500 entered bear market territory, down more than 20% from its January record high.
In afternoon trading, the Dow Jones Industrial AverageDJIA –1.78% was down 412 points, or 1.3%, while the S&P 500SPX –2.07% was down 1.5%, and the Nasdaq Composite was down 2.1%. All three indexes began the day with gains. If the S&P 500 closes below 3837, it would officially be in a bear market. It touched 3810 this afternoon.
The Dow was on pace to post an eighth straight weekly loss, the worst losing streak since 1932. The S&P 500 and Nasdaq were on track to fall for seven straight weeks, their worst showing since 2001.
Much of the decline in investor confidence this week stems from lackluster retail earnings, which has raised fears that a consumer-led downturn is approaching, Canaccord Genuity analyst Martin Roberge noted, as both revenues and margins could come under pressure at these companies in the coming quarters. “[T]he surge in goods prices and inflation translates into demand destruction as consumers have little choice but to shift their spending patterns toward essentials,” he wrote.
That said, Roberge pointed to some silver linings, including the decline in U.S. bond yields, a leveling off for the U.S. dollar and commodities, and partial reopening in China. “These green shoots should allow markets to enjoy the typical relief rallies seen around the -20% correction mark,” Roberge wrote—but warned that if they don’t, a -30% correction could be next.
Speaking of China, sentiment was boosted earlier Friday after the People’s Bank of China lowered the key five-year prime loan rate for the second time this year. The move
Bear market is an excellent opportunity to pick up shares on the cheap. Problem is, when does the falling knife ends? I wouldn't want to buy a stock in the middle of its downtrend, unless I buy in small and slowly while keeping cash on the side to average down if the stock falls further.
Either that or learn to short sell when the whole market is bleeding red.
@olive-juice are we in bear market yet? I remembered when Covid was starting to gain grounds, march 2020, big drops. A family friend in the financial market told me, this thing has legs. Over several days, I added small positions but the downturn didn’t last long. Then it just went up and up. The when there was small drops at the beginning of the ukrain war, I jumped in but it dropped some more. Does anybody know where the bottom is?
@athena We've been in a bear market for a while now. Big techs took a tumble. Looking at the charts, I see some can go down further, while others may be recovering but that depends on the invidual company.
2020 was a fun, crazy year where stocks were on steroids. Most were overvalued so an ensuring correction has to take place, and it did only to follow by the fears of the Ukraine war and inflation which spearheaded the current bear market.
Twitter is showing an Inside Bar pattern. This pattern is both bullish and bearish, but since it occurs on the bottom, it's a bullish signal. Apple is showing a bearish Head & Shoulder pattern. The dark red area is where I expect Apple to fall to. Facebook chart shows another leg down. I'm hoping to pickup shares around $130-$135