US stockmarket bounces back, then holds

The stock market bounced back a bit at the start trading on Tuesday on Tuesday, and then fluctuated off around Monday’s close level. At 2 pm (US time) it was down about 70 points, or 0.3%

If it holds around that level then Friday’s and Monday’s drop may have been just a correction, but there will be some anxiety for a while yet.

The holding pattern in the US today may help limit the impact of the big drop when the NZX market opens this morning, although we could follow the ASX drop 2.33% yesterday until the Australian market shows it’s reaction today.

30 Comments

  1. David

     /  February 7, 2018

    Isn’t it funny seeing all the articles linking Trump with the fall yet the 10000 points it has put on was ignored. Fair and balanced media…sheesh

    • Joe Bloggs

       /  February 7, 2018

      NEW YORK – One day after the Fox News Channel host Sean Hannity blamed him for the historic plunge in the Dow Jones Industrial Average, former President Barack Obama agreed to stop making stocks tumble.

      “Sean Hannity has accused me of making the stock market go down,” Obama told reporters on Tuesday morning. “All I have to say is, ‘Guilty as charged.’ ”

      A visibly chastened Obama said that, at first, he thought that he had gotten away with making the stock market crash, but when he saw Hannity blame him on Fox, “I knew I had been busted.”

      Obama offered scant explanation for why he had made stocks crash on Monday. “I guess since leaving the White House I haven’t really found enough ways to fill my time, so tanking the stock market seemed like something to do,” he said. “But I know that’s not a good excuse. The fact is, I caused a lot of folks a lot of pain yesterday, and for that I am very, very sorry.”

      He said that he would “get to work right away” to return stocks to their previously lofty levels. “I made the stock market go down, and, darn it, I can make it go up again,” he said.

      https://www.newyorker.com/humor/borowitz-report/under-pressure-from-fox-news-obama-to-stop-making-stocks-plummet

      • Kitty Catkin

         /  February 7, 2018

        Trump can’t have it both ways-he certainly implies that the stock market rises because of him. So it must fall because of him, too, if he controls it.

        That article sounds like the Onion’s work.

  2. david in aus

     /  February 7, 2018

    I expect this be one stage of a bear market. The sharemarket will likely hold and go up soon but will not reach new highs. Current high asset prices are predicated on low interest rates and low inflation. If those fundamentals are no longer present, it will lead to a readjustment of asset prices downwards. Most investors are conditioned on buying the dips still. So a crash is very unlikely. A bottom of the sharemarket occurs when people lose all hope. I expect rallies and falls, with ever lower peaks over the next couple of years unless a recession occurs.
    US budget deficits will be growing with fewer buyers and therefore interest rates will go up. US Treasuries are the benchmark interest rates for the rest of the world, and they are going up!

    • Blazer

       /  February 7, 2018

      the only thing we can be sure of…you don’t know what you’re talking about.It is clearly a correction,no bears in…sight.

      • david in aus

         /  February 7, 2018

        Bear markets are only seen in hindsight. Typically you’ll need to see a series of ‘corrections’ and drop of 20% to be considered a bear market.
        Time will tell. Based on my asset allocation of significant interest rate sensitive assets, I have withdrawn from the sharemarket.
        Good luck to those invested in the share market. Especially the NZ government, we will contribute to the Cullen fund again. Typically at the end of bull market, fools.

        • Blazer

           /  February 7, 2018

          ‘Based on my asset allocation of significant interest rate sensitive assets, I have withdrawn from the sharemarket.’….which asset class is not sensitive to interest…rates?

          • Gerrit

             /  February 7, 2018

            Cash Jobs

          • david in aus

             /  February 7, 2018

            Cash does well with increasing interest rates.
            Gold is good in a crisis, I have them as a hedge. But the gold price can decrease, if the real interest rates are high and also they run opposite of the US dollar. Gold is excellent with negative real interest rates.
            Most developed countries are susceptible to debt traps, due to high debts. Not unexpected for central banks to increase interest rates but not by too much and have negative real interest rates with higher inflation. Some central bankers have proposed this policy for any future crises.

            • Blazer

               /  February 7, 2018

              so you acknowledge now that its bankers not Govts that set the…stage.At least you are…learning.

            • david in aus

               /  February 7, 2018

              No fool. Government set the conditions and rules. The central banks are given licence to manage on politicians behalf. Not bankers, as most people think of it, like commercial bank, Goldman Sachs, ANZ etc.
              The politicians appoint the central bank governors to determine the policy. Trump just put in Powell, to get the policies he wants and got rid of Obama’s choice.

            • Blazer

               /  February 7, 2018

              there’s only one fool here…’ Not unexpected for central banks to increase interest rates but not by too much and have negative real interest rates with higher inflation’.
              irms you have N.F.I-‘The politicians appoint the central bank governors ‘.
              Go to another…seminar ..buckwheat.

            • David in Aus

               /  February 7, 2018

              Maybe I have overcomplicated things. For someone like you: yes, it’s always the grey faceless Bankers’ fault, they create money themselves out of thin air, even the local credit union, through fractional reserving. The Man is there to oppress the workers and steal from the people. Viva la revolution.

            • Blazer

               /  February 7, 2018

              its complex on purpose,so that people like you cannot understand it.Govt does NOT appoint the central bank governors…period.

            • david in aus

               /  February 8, 2018

              Enlighten us Blazer. I am happy to be corrected. Who appoints the reserve bank governor?

              I have a news clip:
              “Adrian Orr has been appointed as Reserve Bank Governor effective from 27 March 2018, Finance Minister Grant Robertson says.
              “Following the Reserve Bank Board’s unanimous recommendation to me, I have appointed Adrian Orr for a five-year term at the completion of Acting Governor Grant Spencer’s term,” Grant Robertson says.

              “Donald Trump nominates Jerome Powell to replace Janet Yellen as new US Federal Reserve chair”

            • Blazer

               /  February 8, 2018

              now your usual..twist…’The politicians appoint the central bank governors ‘…now its the NZ Reserve bank Governor .As for the Fed the makeup is even more complicated.You can google the info and educate yourself.
              more…’I expect this be one stage of a bear market’
              and then…’Bear markets are only seen in hindsight’….and the too hard…
              ‘which asset class is not sensitive to interest…rates?’….only one ‘fool’ around here.

            • david in aus

               /  February 8, 2018

              I know I shouldn’t engage, but I am weak. The Reserve Bank of NZ is the central bank of NZ. Sometimes you have to point out that 1 + 1= 2.

            • Blazer

               /  February 8, 2018

              Do you know what a rubber stamp is? Get one with idiot on it and stamp your forehead. ..so you don’t. ..forget.

            • PDB

               /  February 8, 2018

              Best you quit whilst you’re so far behind Blazer…

            • Blazer

               /  February 9, 2018

              ‘If confirmed by the Senate, Mr Powell would become the first person without an advanced economics degree to hold the job since William Miller in the late 1970s.’-‘Trump just put in Powell, to get the policies he wants ‘
              ‘The Reserve Bank is an independent central bank ‘
              ‘Most developed countries are susceptible to debt traps, due to high debts. ‘….this guy’s …unbelievable.

      • Kitty Catkin

         /  February 7, 2018

        Not real bears, Blaze, it’s a stock market usage.

  3. PartisanZ

     /  February 7, 2018

    Phew … calumny averted … for now …

  4. Gezza

     /  February 7, 2018

    Just needs more road cones?

    • PartisanZ

       /  February 7, 2018

      What does?

      P.S. I’m a big fan of road cones. Their proliferation must surely have saved the NZ economy several times over? It would be fascinating to follow the life of a single road cone … They end up in the strangest places …

      • Gezza

         /  February 7, 2018

        The stock market. They need to separate the bulls from the bears.

        • PartisanZ

           /  February 8, 2018

          In which case they need an abbatois (damn … stock killing place) for one and tranquilizer darts for the other …

    • Kitty Catkin

       /  February 7, 2018

      I blame the parents,