- Dow and Nasdaq lead the way as major US markets drop points possibly due to the European central bank cut-down
- Michael Block, the market strategist at Third Seven Advisors, seems to think that there is a global slowdown
- Investors are pulling away since this is the second week run of losses
Stocks went down on Thursday after the European central bank cut-down its economic up-beat for 2019, signaling a mounting array of fears on the global economy.
The Dow Jones Industrial Average made it to 200.23 points moving average at 24,736.36, while the gauge’s 200-day moving average was at 25,125.81. At these levels, the short-term average is just about 390 points, or about 1.6%, short of crossing above the longer-term average. The Nasdaq Composite dropped 1.1% to 7,421.46. The indexes posted their fourth consecutive loss.
Goldman Sachs, Citigroup, Bank of America, and Morgan Stanley all dropped by around 1%. The SPDR S&P Bank ETF (KBE) fell to 1.6 percent.
Markets were characterized by adverse corporate and economic developments, especially unsolicited growth numbers out of Europe and China.
“Something is wrong here. There is this global slowdown. We can’t deny it,” said Michael Block, market strategist at Third Seven Advisors, a private wealth management firm.
Johnson & Johnson (J&J) recorded its worst findings on the stock since 2002, making it the most hit on the Dow. J&J solicitors apparently told Reuters that their investigations are “false and misleading.”
This pronounced selloff for J&J had an unprecedented impact on the Dow. To make matters worse, it’s a widely held stock, which makes its impact entirely out of proportions.
“This is supposed to be a hiding place. It’s certainly a blow to a lot of folks,” reiterated Block. “Pain begets pain.”
39 Billion Dollars Wiped Out
This latest slide has left US markets with a second week of a losing streak.
The 11% fall in the fourth quarter for the S&P 500 is on the verge of being its worst since 2011. This kind of fourth-quarter loss is rarely seen.
According to Bespoken Investment Group, the S&P 500 has locked down 10% or essentially more in the up-close quarter of the year 10 times since 1928.
A record $39 billion was pulled from global equities by jittery investors, according to Merill Lynch report released on Friday. In addition to that a $ 28 billion exited stocks, a second-highest ever recorded. Another $ 8.4 billion was yanked from investment grade bonds.
“Capitulation out of risk” is how Bank of America chief investment strategist Michael Hartnett described it.
This is to the safety of the American dollar which recorded an 18-month high on Friday against an entourage of currencies.