What the Heck’s Happening to the Global Stock Markets?
According to our soothsayers, when the Fed decided to keep interest rates where they’ve been since 2008, at near zero, rather than raise them, it should have triggered a big stock-market rally. But that’s not what happened.
Or rather, it triggered some rallies, but soon the hot air hissed out of them and they deflated. That’s what’s different this time: apparently nothing can keep these stocks propped up at these dizzying levels, not even the Fed.
Friday in the US, stocks rallied at the open, and by 1 PM, the S&P 500 hit 1,953, up 1% intraday and looking strong, when you could suddenly hear the hot air hissing out of it. In two hours it plunged 31 points to 1,922, before bouncing at the last hour to close down 1 point.
That left it down 1.4% for the week and 6.2% for the year. It’s down “only” 9.4% from its all-time high in May, with a lot more room to fall. Despite its nerve-wracking daily gyrations, it has gone absolutely nowhere since June 12, 2014.
The most hated asset class of all
The asset class that the Fed has been trying to render as appealing as a mildewed wet blanket – cash in bank – handily beat the S&P 500 without all the gray hairs and fees.
The Nasdaq wasn’t quite so sanguine on Friday, however. It opened up 51 points, at 4,785, then relentlessly dropped 126 points, for a 2.5% swing, before bouncing off a little at the end and closing at 4,686, down 1% for the day, and 3% for the week. Now it’s back where it had been on November 13, 2014, and in March 2000.
The Dow remained in the green all day despite its gyrations and closed up 0.7%. At 16,314, it’s down 0.4% for the week and back where it had been on Christmas Eve 2013. Yup.
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