A “bear market” is a declining stock market in which stocks have declined 20% or more. NASDAQ is technically in a bear market; neither the S&P 500 nor the Dow-Jones Industrial Average are in that territory. So, technically, what’s going on right now is a correction.
Disclaimer, don’t take this as investment advice. I have seen the market make me look a fool more times then I can count.
The worrying thing is looking underneath the indexes itself. Looking at individual stocks; while the multi-trillion caps (Apple, Microsoft, Google) are holding reasonably well; “smaller cap” have suffered big declines. Examples, Target (-40%), Netflix (-74%). Disney (-46%), Boeing (-52%), Nike (-39%), Toll Brothers (-39%). The weighing of indexes towards the multi-trillion cap companies is masking the severity of this decline for most stocks.
TBH, combining the signals from the US stock market, foreign stock markets, currencies, bond market; I think the US is on the cusp of a recession, if not already in one. Europe, Japan, China and much of the developing world are in even worse shape.
Hence the title of this post. It feels like a bear market; it looks like a bear market; technically it’s still not a bear market.
The weighting of indices towards high cap stocks has masked how little many small caps have risen.
Now its an official bear market….
S&P 500 and NASDAQ certainly look like it.
The curves are VERY interesting. A lot different than anything we’ve seen in years.
Which curve? The treasury yield curve? The chart of the decline in the stock indices?
Decline in the indices over one year, five years.