The Dow drops another 800 points (-3.3%) in one day, other markets down too - Sensationalist Headlines

[URL="https://www.washingtonpost.com/business/economy/us-stocks-fight-to-pick-up-any-ground/2018/02/08/08cbda2a-0ce0-11e8-8b0d-891602206fb7_story.html"]Dow sheds more than 800 points on specter of higher interest rates[/URL] [QUOTE]The Dow Jones industrial average tipped more than 800 points into the red, down 3.3 percent by the last hour of trading as fears deepened over rising interest rates. The technology-laden Nasdaq and the broad Standard & Poor’s 500-stock index also drifted lower — and each was down more than 2 percent. It was the seventh down day in nine for the S&P 500. [B]The 2 percent pullback Thursday across U.S. indexes is something that did not happen in all of 2017. And the 2018 gains for the Dow and S&P have been wiped out.[/B] ... All major sectors were down Thursday, with real estate and financials leading the plunge, signaling investor unease around interest rates and the prospect of higher inflation. ... Some say the fluctuations are because of the good news, with fears that an overheated economy and nascent inflation will push the Federal Reserve to raise rates. The latest inflation figures are anemic at 1.7 percent. “Investors are nervous about three things,” said Larry Hatheway, an economist and Zurich-based asset manager. “There is an emerging inflation story in the U.S. — and rising U.S. inflation makes monetary policy less predictable. Accelerating inflation may crimp corporate profits. And the Fed may hesitate to come to the rescue. They won’t be able to provide that nice predictability and certainty that they provided ever since they started the rate hikes a few years ago.”[/QUOTE]

Nothing to see here just more good news!

[QUOTE=grr164;53118058]Nothing to see here just more good news![/QUOTE] i know its bad economic-wise but i cant just help and laugh when the schmuck has been yelling "ECONOMY IS GOOD ITS ALL ME ITS ALL MY WORK" all along

BUY THE DIP (unironically)

I'm really tired of winning so much.

Final drop today was 1032, making it the second biggest intraday drop of all time, behind Monday's

[QUOTE=Bob The Knob;53118094]Final drop today was 1032, making it the second biggest intraday drop of all time, behind Monday's[/QUOTE] Again: Stop judging the size of drops by points. It's very misleading. This isnt even in the top 20 intraday percentage drops.

[QUOTE=Harbie;53118100]Again: Stop judging the size of drops by points. It's very misleading. This isnt even in the top 20 intraday percentage drops.[/QUOTE] I don't understand this mindset, is not the amount of money lost still a monumental amount? Aren't still people losing lots of money, like, percentage or not? This seems like some fucked up logic "oh only a couple people got fucked so it's totally nothing" like no...this is money, not just some relative scale.

[QUOTE=Tetracycline;53118121]I don't understand this mindset, is not the amount of money lost still a monumental amount? Aren't still people losing lots of money, like, percentage or not? This seems like some fucked up logic "oh only a couple people got fucked so it's totally nothing" like no...this is money, not just some relative scale.[/QUOTE] it is a relative scale, actually. the dow jones industrial average is a weighted index, not just dollar value

[QUOTE=Tetracycline;53118121]I don't understand this mindset, is not the amount of money lost still a monumental amount? Aren't still people losing lots of money, like, percentage or not? This seems like some fucked up logic "oh only a couple people got fucked so it's totally nothing" like no...this is money, not just some relative scale.[/QUOTE] The stock market dropping 5% does not imply that 5% of people invested in the stock market lost all their money. It implies that all of the people invested in the stock market lost 5% of their money each. I think that was what you were trying to imply? Anyways, equity and the economic system continually generates wealth. As a rule, the market is constantly growing in the long term. You could have literally invested the night before the 08 recession and made back 1.8 times your initial investment had you held on to it through the recession. That's why companies report growth in terms of their metrics one year prior instead of their metrics at IPO. I think you don't understand that mindset because you don't understand the stock market.

[QUOTE=Harbie;53118150]The stock market dropping 5% does not imply that 5% of people invested in the stock market lost all their money. It implies that all of the people invested in the stock market lost 5% of their money each. I think that was what you were trying to imply? Anyways, equity and the economic system continually generates wealth. As a rule, the market is constantly growing in the long term. You could have literally invested the night before the 08 recession and made back 1.8 times your initial investment had you held on to it through the recession. That's why companies report growth in terms of their metrics one year prior instead of their metrics at IPO. I think you don't understand that mindset because you don't understand the stock market.[/QUOTE] So when the DOW jones loses points the stock market literally perfectly distributes the loss to each and every member of the stock market? Yeah, no. Some people could have lost a lot from this, or increased the time to return on their investment, a death sentence when an impending true crash is coming. [editline]8th February 2018[/editline] Your logic is basically that the economy is so big that even record breaking drops don't matter. Sorry, but the stock market is pretty much built on nothing but speculation, so continually losing hundreds and hundreds of points can be very very bad. [editline]8th February 2018[/editline] Just because some entities make more money after stock crashes n shit doesn't mean that it's good for society

[QUOTE=Tetracycline;53118165]So when the DOW jones loses points the stock market literally perfectly distributes the loss to each and every member of the stock market? Yeah, no. Some people could have lost a lot from this, or increased the time to return on their investment, a death sentence when an impending true crash is coming.[/QUOTE] Not perfectly distributes, but as a rule of thumb, yeah, that loss is spread somewhat evenly. If the Dow drops 5% you'll find some stocks that dropped 10%, some that dropped 5%, and some that dropped 2%, but very few to none that dropped 50% or more. The intensity of the drop is usually determined by what particular sector a stock is in, too. If tech stocks drop 10% while the rest of the market drops 5%, that extra loss is on the investor for not diversifying. On top of all that, the vast majority of investors should be putting money into index funds, which track very very close to indexes like the Dow or S&P 500.

The point drop really isn't significant, it's the % drop that matters. This isn't a terrifying venture, but more of a correction. It's what the stock market is [I]supposed[/I] to be at now, and that's because of a lot of factors that are currently happening right now. Like the article says, these are two biggest points for it: 1.) The tax cuts entail greater borrowing (for the government). Greater borrowing entails greater bond yields. Greater bond yields entails less attractive stocks. While the tax cuts are seemingly a good step towards a stronger middle-class (it's really the first time a direct tax cut has happened in a long time towards the general middle-class, rather than dumb indirect "trickle-down" trickery), the administration really can't afford doing them right now. I'm actually getting slight flashbacks of Bush's cuts, but the tax reform bill isn't quite at that travesty (yet). The government is going to have to borrow almost $1 trillion dollars this year alone (which is A LOT compared to last year). The Treasury remarked on this, citing an increase in [URL="http://www.foxbusiness.com/features/2018/01/31/treasury-to-rely-on-more-short-term-borrowing-as-deficit-seen-climbing.html"]short-term borrowing to offset the growing deficit[/URL]. Bonds are going to be plentiful, so they're gonna have to be made more attractive. But Big Business isn't going to be inclined to buy into debt, [URL="https://www.wisdomtree.com/blog/2017-10-23/bullish-us-corporate-credit-the-other-side-of-tax-reform"]because they're getting a lot more money from the tax cuts[/URL]. There's no need to leverage debt over equity at this point in time, so why would they? 2.) The employment rate. We're past full employment, so that's great! Unfortunately, that comes with setbacks. The more people that are employed, the more money is being made (cool!), which is realized by larger wage growth (cool!), which leads to soaring inflation at some point (not cool!). In order to circumvent this, the federal government must switch policy and counter, especially since we're currently in an essentially deflationary period. The person that heads the Fed has just recently been re-appointed, so investors really don't know how they're going to react to the challenges that are coming. Interest rates are the indicator to look at here, as they're potentially the most significant factor in this regard (the big reason for the drop today). Wall Street, in turn, has no idea how the general public will react to the new Fed, so they're shying away from the stock market, and heading towards the more (seemingly secure) bond market as of now. Those two are the biggest factors from what I've seen, but there's a lot more that potentially goes into it. It's pretty uncomfortable, since we're at quite a bubble-like status right now, but we'll see I suppose. If the percentage drop hits 20%, I'll be shitting bricks bigger than the DOW.

[QUOTE=Tetracycline;53118165]So when the DOW jones loses points the stock market literally perfectly distributes the loss to each and every member of the stock market? Yeah, no. Some people could have lost a lot from this, or increased the time to return on their investment, a death sentence when an impending true crash is coming. [editline]8th February 2018[/editline] Your logic is basically that the economy is so big that even record breaking drops don't matter. Sorry, but the stock market is pretty much built on nothing but speculation, so continually losing hundreds and hundreds of points can be very very bad. [editline]8th February 2018[/editline] Just because some entities make more money after stock crashes n shit doesn't mean that it's good for society[/QUOTE] Yeah he's right actually I fucked it If the Dow drops from 20k to 19k you've lost 5% of your money. If it drops from 2k to 1k you've lost half your money and society has probably collapsed

I snipped this from the OP because I realized it'd be a better idea not to start a SH thread with overt politics out of the gate, but as the Dow falls, I decided to look at what the President had to say. [media]https://twitter.com/realDonaldTrump/status/961253168968622086[/media] Looks like the stock market won for so long and so hard it got tired of winning. Trump takes credit for the rise, blames the stock market itself for the fall. Nice.

[QUOTE=elixwhitetail;53118220]Looks like the stock market won for so long and so hard it got tired of winning.[/QUOTE] judging from what harbie said in the other thread (he seems to know what he's talking about) isn't this kind of the case lol...?

[QUOTE=Tetracycline;53118165] [editline]8th February 2018[/editline] Your logic is basically that the economy is so big that even record breaking drops don't matter. Sorry, but the stock market is pretty much built on nothing but speculation, so continually losing hundreds and hundreds of points can be very very bad. [editline]8th February 2018[/editline] Just because some entities make more money after stock crashes n shit doesn't mean that it's good for society[/QUOTE] 1. This isn't a record breaking drop by any metric that actually matters. 2. Yes, the economy is that big, and yes, growth is that assured. [url]https://www.marketwatch.com/investing/index/djia/charts[/url] Set the moving average on this to 15 years or more. This is the timeline you should be thinking about while investing.

For economics retarded such as me, what does it exactly mean when DOW drops like this for the past week

[QUOTE=elixwhitetail;53118220]I snipped this from the OP because I realized it'd be a better idea not to start a SH thread with overt politics out of the gate, but as the Dow falls, I decided to look at what the President had to say. [media]https://twitter.com/realDonaldTrump/status/961253168968622086[/media] Looks like the stock market won for so long and so hard it got tired of winning. Trump takes credit for the rise, blames the stock market itself for the fall. Nice.[/QUOTE] Like I said in the other thread, he's "technically" right about the good news making the stock market fall. The strong job and wage growth report is good news for the economy as a whole. It has, however, led to investors reallocating their portfolios which has led to a temporary downturn in the market. You should also keep in mind the stock market did incredible this past year. Pullbacks like this are expected after such strong growth, and are indeed healthy. Think of it as a possible future bubble deflating slowly before it gets big enough to cause a legitimate recession. What's stupid on Trump's part is trying to take credit for economic change, and somehow implicating investors as "making mistakes" by reallocating assets in response to new info. [editline]8th February 2018[/editline] [QUOTE=CruelAddict;53118233]For economics retarded such as me, what does it exactly mean when DOW drops like this for the past week[/QUOTE] The Dow is an index of the market. When the dow drops 5% you can bet that most stocks dropped somewhere in the area of 5%.

[QUOTE=elixwhitetail;53118220]I snipped this from the OP because I realized it'd be a better idea not to start a SH thread with overt politics out of the gate, but as the Dow falls, I decided to look at what the President had to say. Loading Tweet... [URL]https://twitter.com/realDonaldTrump/status/961253168968622086[/URL] Looks like the stock market won for so long and so hard it got tired of winning. Trump takes credit for the rise, blames the stock market itself for the fall. Nice.[/QUOTE] Oh you fucked with the wrong hombre, stock market, you're gonna regret that. *punches stocks*

[QUOTE=Harbie;53118082]BUY THE DIP (unironically)[/QUOTE] i keep buying the dip and the stocks keep going down do i keep buying

[QUOTE=Svinnik;53118325]i keep buying the dip and the stocks keep going down do i keep buying[/QUOTE] Yes. Hell, each time it goes down you should buy more.

[QUOTE=Svinnik;53118325]i keep buying the dip and the stocks keep going down do i keep buying[/QUOTE] This is an actual investment strategy. It's known as dollar-cost averaging, which is very effective. It's just that it's set on a drawn schedule.

[QUOTE=Omilinon;53118187]The point drop really isn't significant, it's the % drop that matters. This isn't a terrifying venture, but more of a correction. It's what the stock market is [I]supposed[/I] to be at now, and that's because of a lot of factors that are currently happening right now. Like the article says, these are two biggest points for it: 1.) The tax cuts entail greater borrowing (for the government). Greater borrowing entails greater bond yields. Greater bond yields entails less attractive stocks. While the tax cuts are seemingly a good step towards a stronger middle-class (it's really the first time a direct tax cut has happened in a long time towards the general middle-class, rather than dumb indirect "trickle-down" trickery), the administration really can't afford doing them right now. I'm actually getting slight flashbacks of Bush's cuts, but the tax reform bill isn't quite at that travesty (yet). The government is going to have to borrow almost $1 trillion dollars this year alone (which is A LOT compared to last year). The Treasury remarked on this, citing an increase in [URL="http://www.foxbusiness.com/features/2018/01/31/treasury-to-rely-on-more-short-term-borrowing-as-deficit-seen-climbing.html"]short-term borrowing to offset the growing deficit[/URL]. Bonds are going to be plentiful, so they're gonna have to be made more attractive. But Big Business isn't going to be inclined to buy into debt, [URL="https://www.wisdomtree.com/blog/2017-10-23/bullish-us-corporate-credit-the-other-side-of-tax-reform"]because they're getting a lot more money from the tax cuts[/URL]. There's no need to leverage debt over equity at this point in time, so why would they? 2.) The employment rate. We're past full employment, so that's great! Unfortunately, that comes with setbacks. The more people that are employed, the more money is being made (cool!), which is realized by larger wage growth (cool!), which leads to soaring inflation at some point (not cool!). In order to circumvent this, the federal government must switch policy and counter, especially since we're currently in an essentially deflationary period. The person that heads the Fed has just recently been re-appointed, so investors really don't know how they're going to react to the challenges that are coming. Interest rates are the indicator to look at here, as they're potentially the most significant factor in this regard (the big reason for the drop today). Wall Street, in turn, has no idea how the general public will react to the new Fed, so they're shying away from the stock market, and heading towards the more (seemingly secure) bond market as of now. Those two are the biggest factors from what I've seen, but there's a lot more that potentially goes into it. It's pretty uncomfortable, since we're at quite a bubble-like status right now, but we'll see I suppose. If the percentage drop hits 20%, I'll be shitting bricks bigger than the DOW.[/QUOTE] Actually soaring inflation is great at this point in time. Inflation has been incredibly anemic and without it we can't raise interest rates, which are still at a very low point. If there is an economic crisis now then we can't lower interest rates to encourage spending to get us out of it. Just wanted to correct that bit. Inflation is incredibly good for where we are now.

[QUOTE=elixwhitetail;53118220]I snipped this from the OP because I realized it'd be a better idea not to start a SH thread with overt politics out of the gate, but as the Dow falls, I decided to look at what the President had to say. [media]https://twitter.com/realDonaldTrump/status/961253168968622086[/media] Looks like the stock market won for so long and so hard it got tired of winning. Trump takes credit for the rise, blames the stock market itself for the fall. Nice.[/QUOTE] that's kinda exactly what happened though

[QUOTE=Harbie;53118243]wage growth report[/QUOTE] I keep hearing some people say this, but is there information where (locations and occupation types) exactly that growth is happening?

[QUOTE=gufu;53118543]I keep hearing some people say this, but is there information where (locations and occupation types) exactly that growth is happening?[/QUOTE] [url]https://www.bls.gov/news.release/empsit.nr0.htm[/url] Here's the raw report. You can probably find some articles outlining where exactly growth occurred.

Isn't also Quantitive Easing Unwind in progress? FED started dumping stocks (clearing it's balance sheet), isn't it so?

[QUOTE=ForgottenKane;53118451]Actually soaring inflation is great at this point in time. Inflation has been incredibly anemic and without it we can't raise interest rates, which are still at a very low point. If there is an economic crisis now then we can't lower interest rates to encourage spending to get us out of it. Just wanted to correct that bit. Inflation is incredibly good for where we are now.[/QUOTE] You're totally right. I should've made a point that inflation is a good factor as of right now. Thank you for correcting me.

[QUOTE=Furnost;53118064]i know its bad economic-wise but i cant just help and laugh when the schmuck has been yelling "ECONOMY IS GOOD ITS ALL ME ITS ALL MY WORK" all along[/QUOTE] Anyone with more sense than air in their head knew he was blow-harding like a motherfucker when he came on with that "OOH LOOKIT ME I FIXED THE ECONOMY BECAUSE I R GUD BUSNESSMAN" bullshit. Same shit happened with Obama. Economy did good, Republicans said "THAT'S BECAUSE OF STUFF BUSH DID". Economy did bad (during the start especially, but any time during his presidency) and they lost their fucking minds.