Stocks: It’s Bad, But Not That Bad

I was appointed the finance correspondent for Senior Life Advisor, an online magazine for investors near or in retirement.  The articles for Senior Life Advisor were designed to offer actionable information as well as items of interest about economics, investing and personal finance.

Coronavirus may not have reached our shores, but US markets have plunged in panicky selling this week as investors contemplate its’ impacts on a variety of industries and global trading partners.  The stocks in the S&P 500 — the 500 largest public companies in the country — lost $810 billion in value yesterday after a $1.3 trillion loss on Monday for a total two-day loss of $2.1 trillion or 6.3%.  

It’s bad.  

But, it’s not that bad, at least when you look at other market swoons. There have been 10 two-day declines of more than 6% since 2008.  Six of them were more than the combined loss from Monday and Tuesday.  

  • For the Wednesday and Thursday ended November 20, 2008, the S&P stocks dropped 12.4% as the breadth and depth of the global recession came into full view.  
  • The Dow fell 680 points or 8.1% on the two days ending December 1, 2008 as sentiment soured further.  
  • For the two days ended August 8, 2011, S&P 500 stocks fell 6.7% after credit rating agency Standard & Poor’s Corporation downgraded the rating for United States’ sovereign debt from AAA, or “risk free”, to AA+.
  • The most recent comparable one day drop since Monday was February 8, 2018 when fears about the bond market, inflation and interest rates seized investors and stocks fell 3.75%.  

Hopefully, we won’t be reporting on the worst three day declines on Thursday.  

Next up:  How coronavirus fears are seeping into pharma, e-commerce, consumer electronics as well as other industries.  

Source:

Chinese percent of World GDP Growth https://www.weforum.org/agenda/2017/10/these-countries-are-leading-the-way-on-growth