[Bourne]

What do the fellow accountants think of the Dow closing -1,100 points today? Completely wiped out 2018 gains, biggest drop in value since 2011. Let’s hear some input. (Need something to keep me from studying for tomorrow’s exam)

[Recked]

NIIIICE.
I'm waiting for a market correction to sink some funds.

Not sure what the Fed intends to do if the market keeps on dropping.

[Recked]

[Tim]

I've been paying down debt instead of investing so it doesn't really affect me much. If it's a sign of a coming recession, though, that would be bad. Let's hope it corrects.

[CoachEmUp]

The Dow and the incessant local news and national media quoting it should end. An index of 30 stocks is not an index that should be so widely quoted.

That said the S&P 500 was also down 4% today. A lot of it (from my educated guess) was “put” calls that people worried about a sell off had in there to lock in the profits they reached from the market run up. The question is whether they come back in or not.

I would bank on the market heading back up this year on the back of the corporate tax “gift” that was passed and strong earnings. That said what I think doesn't really matter! It's what do the institutional investors, and the large amount of capital they have, think.

[Bourne]

Likewise. A couple more months and I'll have some money in the market, I guess it's good timing for me lol

[Bourne]

You are correct, but the Dow has some of the biggest companies. Older people tend to invest in bigger, more established companies meaning the Dow being down 1,100 points in one day means quite a bit for them.

As for the rest of the year, yeah I have no idea what will happen. But I think it's inevitable that rates will continue to rise and we will be out of the very attractive era of cheap borrowing. It'll be interesting to see the impact of the tax plan mixed in with all of this.

Also, with the strong earnings comment you may be correct. After the new tax law passed the market kind of already began pricing the increase in earnings into the asset prices, hence the huge rally (my opinion), now for the market to come back down to reality, we may see the earnings make quite the impact.

[CoachEmUp]

Long term I think adding to the deficit when times are good (economy is strong) with this tax cut is a disaster waiting to happen. Will this tax break spur long term growth, jobs being brought back here from overseas, companies making capital expenditures? Cap-X probably, the other two I have my doubts.

Rates going up may explain some of the selloff… but rates are still at historically low levels. Also we aren't seeing flows out of equities and in to bonds.

I am in the Warren Buffett school of investing, “buy and hold forever.” So days like these are just part of the ride. Again just my 2 cents.

[KAM]

Its really not that big of a deal.
–
1,100 points is just a 4.6% drop. And a 4.6% drop isn't significant when last year the market had a 18% return. And then you have all those huge gains since the recession happened.

Macro > micro prospective

[Bourne]

I also like to think long term (not currently in the market as I've been out of college < 1 year and wanted to pay off student loans first), but discussing the major day to day moves and speculation on the reasoning is enjoyable.

I'm not sure it'll help bring jobs back from overseas, but I think we can definitely expect (and are already experiencing) current companies thinking about taking operations overseas to stay in the U.S.

[jjjgolf500]

-5%, big deal. Cryptocurrency is like -70% the past month or so…..

[Bourne]

Stock market being down 5% is a bigger deal than the cryptos being down 100%. Stock market impacts our economy a hell of a lot more than the crypos do.

[jjjgolf500]

That was a joke.

[Bourne]

Oh lol my bad. It is interesting to watch the volatility of the cryptos and where they'll be in a few years from now though.

[LawGuy]

Interestingly, many pundits are attributing the drop to a strong US jobs report, which foreshadows rising interest rates from the fed. It is hard to predict what will happen given that the market has been on fed-induced steroids for the last 10 years.

I don't think this particular drop is any cause for immediate, serious concern. Even if the drop does continue through the week, the proposed (ostensibly bipartisan) infrastructure plan will prop things up. That being said, I think the US dollar is going to take a serious beating in the mid to long term. For this reason, I will probably start buying crypto currencies again when I feel that the slump has bottomed out.

[Author]

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