Stocks Bounce Back From Edge of Bear Market

Shares had their best day since 2009, but the S&P 500 is only back to where it stood on Dec. 20, and still on pace for its worst annual performance since the financial crisis a decade ago.

Comments: 193

  1. The economy is still in good shape. Had the president concentrated on the state of the economy instead of insisting on the wall, the markets would never have shuddered. But now they have and his behavior makes it impossible to have confidence in the future. It is very important that Republicans understand that this president is not good for the country, not good for the markets and not good for the world. His tax breaks were ill conceived and will have future consequences in terms of the deficit. It's time to take a look at whether we want the 'drunk uncle' in the White House. The last week has made the world realize that this is no joke. Do your job Washington! China has a fifteen year plan, we have a fifteen minute and 140 character plan. This is not a plan.

  2. The "economy" is only strong for 0.01%, thewriterstuff.

  3. @njglea The economy is strong for anyone who has a job that didn't have one after the crash of 2008. The economy is not just for investors in the stock market, it is for everyone who has to pay their rent of a mortgage.

  4. @njglea Which is why we got Trump.

  5. The U.S. stock market veered up and down for months before it finally crashed in 1929. In those days only the wealthiest put their money on the craps tables but even then their greed caused mass unemployment and nearly destroyed OUR United States. Fortunately, FDR/Elanor Roosevelt stepped in and used unprecedented power to create government jobs so people could eat and social safety nets so 99.9% of the people would be safe when greed went out of control again. Those steps saved OUR country and countless lives - and allowed America to become the prosperous nation it was. The Con Don has made sure the same steps won't work again by putting us further in Trillions dollars of debt and trying to make sure his Robber Baron brethren control OUR U.S. Treasury and cabinets so they get the contracts to use the money at slave labor costs. Let the markets fall. Do NOT bail out the International Mafia Robber Barons again. WE THE PEOPLE are prepared to save OUR country with OUR ingenuity and guts in every way we can and WE are what makes America great!

  6. @njglea You give short shrift to the role of WWII in ending the Great Depression. New Deal programs undoubtedly gave needed relief to many people, but they didn’t solve the depression. You also ignore the numbers of people far from the top 1% who have money, directly or indirectly, in the stock market.

  7. @Lindah Functionally, WWII was a government program that differed only in degree from other govt. programs as far ending the depression is concerned. An equal government program without the war would have been just as effective. In fact, FDR's intervention in the economy began to be scaled back after his first term thanks largely to determined opposition.

  8. “Stocks Rise” - after Trump urged his crazed followers to “buy on the dip.” How many of these people will “buy” on credit? Only to see the value of their “purchases” evaporate, when Trump’s assurances that they’ll profit from his advice turn out to be wrong? Trump cares only about his own well-being. Thus, he is incapable of factoring in the well-being of his followers and the fallibility of his advice to them. He’s likely shooting himself in the foot with this advice. But what about their welfare? What about how many will suffer every time the markets go lower? Trump has made himself appear to be a Fortune Teller. And when he turns out to be wrong - yet again - he’ll find someone else to blame. I hope his followers hang onto their money. Or their common sense. Otherwise they’ll be fleeced for sure. Maybe not today. But soon.

  9. The traders need to get a grip and stop their foolish wrong-headed speculation. This economy is very strong and will remain strong for at least a year or more. And the Feds need to be cautious of too much interest rate growth so they don't slow us down too much. Again, Trump is right.

  10. It's not about the state of the current economy but of the future economy and how much confidence they have it in it. The ultimate voting with your feet/wallet. Instability and uncertainty are not the means to establish confidence.

  11. @Patrick McCord, you lost us at “trump was right”.

  12. @Patrick McCord The Markets have never reflected the economy. They are a completely different instrument. They are never grounded in the present. Trump is a serial failure who depends on dark foreign money to survive. Learn to read the technical charts and not Trump's insipid tweets.

  13. It's beginning to look a lot like a Republican Administration. But, Trump is trashing the stock market in record time. It took Bush W. nearly seven years.

  14. Trumponomics at work. Up; down or sideways. Complete chaos. If your spouse ran your household budget like this; you would take away their bank book.Dems in Jan need to freeze this Trump fiasco. Ray Sipe

  15. The run was a result of the Obama's economic strategy, just like everything else it must be undone.

  16. Many of trump's supporters are too occupied collecting social service benefits to think about or care about us folks that pay for them. His supporter: corporate welfare "persons" and his many rural America comrades.

  17. NOT FOR LONG! Trump will screw this up as he has done to everything else. He is quick to take credit for Market increases which he did not cause and silent when the bottom falls out because he messed with things that he has no business doing. How soon we forget, or ignore, those trade war issues, political instabilities in NK, China and the Middle East, the huge new national debt burden and temporary reward of $1.4 TRILLION to the rich. Very soon the rest of the country will wake up to no national health care, no infrastructure repair, failing education and a totally corrupt politics system under Trump. If they hate instability now, just wait until this fit hits the shan! Don't count on your 401Ks OR Social Security OR Medicare - we won't have the money. Trump, Mnuchin, Ross, Koch and the rest of the acolytes will.

  18. Today I’ve seen headlines from “Markets up!” to “Markets down!” to “Markets up!” and so on. I particularly like how a market drop of 19.7% isn’t a bear, but 20.0 is one. If a business gets tanked because rates went up 0.25%, the business has much bigger issues. Yes, the market volatility is as good as the presidents. What did it do today? Look after it closes. Why is all of this noise, esp. Trump, considered news? Yes the Fed Chair was going to get fired, now it’s all rosy. Who believes these stories as they come out anymore? The White House is more about disinformation that governing with any sense of direction. Sadly, the news seems to follow.

  19. Isn’t it a bit early to claim “stocks bounce back”? Perhaps we should at least wait till the end of the day? I’m expect Trump’s minions are busy - getting money from their credit cards to buy on the famed “dip” - only to find that in a few days that dip will be just a drop in the bucket; and their credit card will still demand to be paid (or claim interest on the debt).

  20. This is only good for those who make money on market volatility. I think we do not tax this type of transaction enough. The stock market is for investment, not gambling.

  21. The longer we/the market refuse/s to get to capitulation, the harder we will fall when we finally get there.

  22. Don’t worry they’re coming back down. With the reduction in the corporate tax rate, the entire economy has been flooded with cash. The Trump Administration’s policies have been nothing but inflationary, with the objective of putting cash in wealthy donors’ pockets. The Fed is withdrawing that cash 1-for-1, forcing companies to use the incremental dollars to invest in their businesses and fund their own buybacks & dividends, rather than taking unsecured loans. The have-your-cake-and-eat-it-too hypothesis is quickly eroding, snapping valuations back to sub-status-quo with limited positive catalysts in the foreseeable future. The only question remaining is: who’s going to hold the bag?

  23. The stock market it looking more like a casino than anything else. I can imagine all the traders shoving their money on the pass line and hoping for a seven or eleven on any given day. No thanks!

  24. @Bob Burns And we all know trump's record with casinos.

  25. Better to put your money under a thick mattress.

  26. Remember when the WH stood behind the President and reinforced his policies and messages, NOT frantically putting out fires set by the delusional political arsonist Trump because of his sick obsession with himself? Remember when lies were still lies and people have the decency to admit to lying when caught?

  27. @Min Wu-Hopefully the stock market gyrations are enough to penetrate the Fox Entertainment News bubble. Or at least their advertisers being hurt by this administration will stop enabling them and pull their advertising.

  28. Well, this administration now has me asking: How much of this is attributable to FAKE buy orders (following the lead of the Saudi market's "great" gains) and how much to normal (queezy) speculation associated with the "stabilizing" Trump administration's blabber on the economy?

  29. Now this is why I like climate change. It makes up its mind which direction it’s going to go and then it deliberately goes there, not like some fool chicken without a head running around every which way.

  30. This is profit-taking pure and simple.

  31. I saw this a few hours ago, and I thought « what ?? » Just to be sure, I Googled « profit taking ». « Profit taking » is after the stock price has risen, and investors sell stocks to turn their profits into true Dollar profits. It usually leads to some price decline. The news item is about a price increase, today, after about a week or more of declines. This is not « profit taking », and apparently you are using a word that you don’t understand.

  32. Some "bounce"! The S&P 500 depicted has only just recovered from Monday's losses perhaps due to some post-Christmas bargain shopping. The market dynamics have not changed with its volatility matching Trump's with a government shutdown; continuing attacks on Fed Chair, Jerome Powell; no break in the trade war with China by the "Tariff Man;" and growing concern of his mounting erratic behavior and instability with no "adults in the room" as economic advisers.

  33. I'm no financial expert. I'm not wealthy and the only stocks I benefit (or not) from are in my retirement accounts and pension. Where is that Harvard-trained economist who can rationally explain to me that this stock market nose dive isn't decoupled from a strong economy and isn't the result of speculators playing a multi-trillion dollar game of craps?

  34. You don‘t need a Harvard-educated person to explain the current volatility, or general short term movements in the stock market. All you need is Benjamin Graham‘s infamous quote: ‚In the short run, the market is a voting machine but in the long run it is a weighing machine.‘ In brief, the basic notion behind this quote is short term movements in the stock market reflect emotional reactions from investors to current incidents and news. In the long term, the performance of stock market will behave like a weighing machine in that these emotional reactions will disappear eventually showing the real intrinsic values of the underlying companies. I would love to get more in detail, but I will probably then submit an even longer answer. Feel free to research and read more from Benjamin Graham‘s publications. All the best from Germany!

  35. @T Kelly - The simplest explanation is this: over the past ten years, large companies have adjusted their business models to make money with low interest rates. Institutional money managers have done the same thing. Now, interest rates aren't so low. Companies and money managers won't do as well, and have to make quick changes to adjust. So even if the economy does well, stocks still need to come down.

  36. @Jonathan: I took a look at a graph of the Dow Industrial Average- it’s about back to where it was before the big tax cut for corporations and the rich. Perhaps we’re just seeing the tax cut sugar high wearing off.

  37. One of the comments noted that Trump said "to buy on the dip". First, the big money is already in and out in .000001 second. Second, with 7 to 8 lies per day, first Trump wouldn't shut down the government. Third, he would shut down the government and accept full blame! Fourth, Right!!!!!

  38. @Quandry take the only reliable advice from trump: do the 180 degree opposite of whatever he says.

  39. The recent stock losses are close to 15% on average and so this bounce has a long way to go to recover the losses. Decent dividends would help too for those average Americans whose retirement portfolios have taken a major blow in December. Good stocks are now available at bargain prices just like after Christmas sales of consumer goods. I expect the stock market could keep rising before new year.

  40. Members of the Trump administration have announced that Jerome Powell's job is safe. If I were Mr. Powell, I'd start cleaning out my office. Once this White House says you're not going to be fired, your sell-by date is approaching.

  41. Who would have confidence in the economy of a country led by an obviously incompetent person who denies objective reality and lies with abandon (except to 7 year old about Santa)?

  42. @Facts Matter Yes, the facts do matter. I'll expand upon your very good post, tweaking it slightly. "Who would have confidence in the economy of a country led by an obviously incompetent Republican Party that denies objective reality and lies with abandon? "

  43. @Facts Matter The 72-year-old pretend president still believes in a pretend TV businessman called 'Donald Trump'. Very marginal.

  44. Trump firing the head of the Fed; "NO WAY" from Trump spokesman; 20 min later; Trump spokesman "Mnuchin just fired the head of the Fed because he was mean to Mr Trump". That is why markets are in a roller coaster. Trump has no principles; only what is good for Trump. Dems must control him in Jan; GOP never will. Ray Sipe

  45. I’d like to thank the GOP for raising my taxes and dropping my 401k. Here’s a New Years wish: may you be crushed and never be a political force again - you and that thing in the White House!

  46. @The 1% - Sorry, but the 401k was the Republicans' idea (and the Democrats fought against.)

  47. @Connecticut Yankee Thanks you for saying this. People act as if 401K's are somehow the normal state of affairs, when in fact their advent was a vicious, self-serving act on the part of corporate America, Republicans, etc. Forcing the average person to invest in the stock market to 'secure' their retirement is criminal.

  48. Remember, we the people are here, kind of in the way. A farm has an optimal number of livestock to run efficiently, it can grow or shrink based on acreage and market supply and demand. But in the U.S., many of us are just in the way. True, the larger the herd, the more income, but that's only with the producing livestock putting out labor, meat, milk, wool and eggs. 38% of the U.S. population is producing, the rest are too young, too old or too lame. The stock market runs independently of the farm like the Friday night poker game at the kitchen table in the farm house. We the people never get into the game, perhaps the cats and dog are lying about, but the rest of us are out to pasture or in the barn. And they're betting bales of hay, grain, milk, meat, eggs, wool and other commodities, and sometimes when the game gets tight, they trade livestock amongst each other. Being resourceful, they even trade time on the tractor, the truck hauling and fertilizer purchases. Towards the end of the night and when they're all soused, they're betting on just about every aspect of the farm including the real property. And so it goes, we read these articles knowing the only thing we can do is hope they don't get into a drunk fight, knock over the kerosene lamp, burn down the house and catch the farm on fire.

  49. But wait! So long as Trump can tweet, and Mnuchin is allowed to be anywhere near a phone, all disastrous things are possible.

  50. @Leigh. 100% agree! Mnuchin and wife should go on a permanent vacation to Fort Knox! Have them count all the gold there. The only reason he hasn't been driven out by his misdeeds is that most of the rest of the cabinet has been far more corrupt! Elsewhere, in "DRAIN THE SWAMP -- NOT" news, Trump's pick for Defense Secretary is a 30-year veteran of Boeing who has no government or military experience and very little foreign policy knowledge -- indeed, by most reports and his Congressional testimony, he is woefully uninformed about foreign policy.

  51. This stockmarket rise does probably not mean much: trading volume is small the day after Christmas. Soon worries will take over again: slowing world economy, trade wars, government shutdown, Trump and Mnuchin tweets... Plenty to worry about. Sometimes, I also wonder wether Trump, Mnuchin and their families are not shorting stocks the day the Donald tweets.

  52. @SJP: The underlying fundamentals hasn’t changed - the tax-cut high has worn off, and the tariffs are still out there. Salaries for most of us are still flat - hard to keep a consumer-based economy humming when fewer and fewer people can afford to buy things. The bubble is deflating, and it’ll take more than happy talk to turn this economy around.

  53. So happy for the oil companies and their investors.

  54. If Trump can drive the market down by his volatile and erratic behavior maybe he can reverse the direction by his buy recommendations.A steadier hand at the wheel coupled with positive comment could get Trump some positive reviews from the market. At least in market terms 2019 could be a better year.

  55. And no one cares about the national debt ? If we don’t see a 3.5% GDP growth there will be a reckoning.

  56. It's not if but when not when our national debt will be huge issues when interest rate gona drive economy into hell. Just focue on paying off ur house and C.C debt asap and have multiple retirement plan aka S.S, Pension, 401k, real estate, liquid assets (cash), gold.

  57. Value investors may be doing some buying, as there are some good companies with decent prices now. I picked up a few stocks this morning, before things really took off. But as an experienced investor, I know that the market goes on forever. There will be days in the future when prices are lower today, and day when they are higher. Nobody blows a horn at the bottoms, or the tops. If you see a company you like at a lowish price, then buy it. The odds are in your favor, and you will probably make money in the long run.

  58. @Jonathan Any recommendations???

  59. Sounds like a horoscope and you will probably make money .... probably or lose money.

  60. I don't know which changes or goes up or down faster, Trump's mind or the stock market. I vote for the mind.

  61. If the stock market is shut for a holiday nothing happens why not shut it for a week as it does not produce any real value? We always get experts for both scenarios at the same time they explain why it is going down and why it is going up so at least there is always an expert right.

  62. Short covering. Don’t get too excited. This wil be a sideways market for the next bunch of months before confidence is restored.

  63. Amazing how much bolstering from the Fed is desired. Trump criticized the Fed for keeping interest rates low during the Obama administration in order to make him "look good". The Obama administration was scratching the economy back from the Great Recession. Trumps policies and erratic governance has shaken confidence and has already squandered economic progress made on all fronts.

  64. Every single thing about Donald Trump is fraudulent, except his unfitness for office.

  65. all it takes is one tweet

  66. "Kevin Hassett,... told reporters...that Mr. Powell’s job was “100 percent” safe....after similar remarks by Treasury Secretary Steven Mnuchin and Mick Mulvaney," The markets are skittish, between China's slowing economy, the tariffs, goverment shutdown, and who knows what else is in the pipeline of uncertainty, watch out for 2019. Oh, Powell's job may be safe, but if the markets continue to tank, who needs an economic adviser i.e. Hassett, or a let's point a finger at the Munchkin, or even the new Chief of Staff Mulvaney. History of this Administration has been renamed "The Expendables".

  67. '...Mr. Powell’s job was “100 percent” safe.' A statement like this, coming from anyone associated with Liar-in-Chief trump, is 0 percent believable.

  68. Vegas has better odds right now than the stock market with the guy we have as POTUS. If you want to play, you better be ready for a good ride. Global Economy slowing down, recession possibilities & Trump's mouth & twitter feed, crazy impulses & his vindictives.

  69. "worst annual performance since the financial crisis a decade ago" Trump's presidency, in a nutshell. The stock market rising was all he could "brag" about (as if any gains had anything to do with him)... ...and speaking of the Border Wall, look at the NY Times article today about the recent (thanks to Bush and Obama) significant improvements in border security etc...Trump voters and Fox news have no idea about this important stuff...

  70. Trump will slip a monkey wrench into any rally. He is taking a more hands-on approach with everything now (based on his prodigious gut's feeling), which means experts will be relegated to the sidelines and Trumpian bedlam will prevail.

  71. "Shares in Amazon, which described the holiday season as “record breaking” without offering financial details, also rose more than 4 percent." Should be illegal to hide the details and is par for the course with the misdeeds and malfeasance of Amazon. But investors are also foolish if they react to Amazon purple prose!

  72. Hey I ran a PR 2 days ago. Yay me! I had a spike in my personal graph line. But my overall trend is as flat as a runway! But at least I'm on a plateau. I'm not sliding down a slope...! Or bulging at a constraint(belt). As to the subject; Whats the overall TREND...?!?!?! Well, we can all look at the graphs and take a furtive look at our 401K's, etc...and see whats really happening. A lot of downward sloping...compounded by a flatness, and stuff that is deep in the well (most wages) and not being pulled out. These little blips and "PR's" are not telling the whole and truest story. We gotta stop these daily shiny object gatherings round the market numbers. Its like a fetish now. The Trends are obvious. As to the causes...lots of room for discussion, but most in need of careful observation and analysis. As to the Trump effects. Its 2019 when we'll truly those hit. I expect by spring/summer...we'll be seeing their real and mainly hurtful effects.

  73. Did the market go up because Trump left the country?

  74. @C.A. Thank God Obama is out of office.

  75. No, because wise investors saw opportunity.

  76. @C.A.— that’s clearly what the editorializing author of the article wanted us to think.

  77. Isn't Trump out of the country? Market rise coincidence? Maybe Iraq will allow him to stay there...

  78. Stock manipulation at the top? The president and the top finance guy say unexpected and unjustified things that scare the market. Prices drop. Then they say things to reassure the market that what they said wasn't true, or implied bad news. Oh, and throw in specific advice to buy up the suddenly low priced stocks of good companies. Prices jump. Doesn't the SEC have an investigative role here?

  79. @Bill It's either manipulation as you state or the market, upon hearing that Powell was safe, took heart that trump was not in charge! Sad ....

  80. @tried IMO no reason to take heart. Given his past performance in self dealing in his 'charity' and his on going emoluments violations with the DC Old Post Office hotel, and the string of frauds (eg 'university') and other money-grasping, a couple bouts of stock fraud would fit right in. This might have been the test run. Hold on for bigger dips later in markets --- around the world.

  81. This is the giddy side of market instability. Look for bigger and bigger twists and turns before a harsh reality ultimately sinks in. Trump is the ultimate destabilizing influence on the market, and will be for as long as he remains in office. He must be removed from office before something happens that cannot be undone.

  82. This drop was a long overdue correction. The stock market was overvalued and had not experienced a significant retrenchment in quite awhile. For those who feel interest rates at 2.5% are two high look back at history.

  83. Mulvaney and Mnuchin: members in good standing of Traitor Trump's vaunted "B" team.

  84. Now if Whosis will just keep his mouth shut, maybe the Markets will get back on track. Fat chance.

  85. Winning is for Losers. Thanks, GOP.

  86. Let's not count our chickens before they hatch. The S&P 500 shares traded at 3:30pm EAT were 1,944,146,680. Average daily volume is over 4 million per day. This is a light trading day and has little value in giving any indicator of direction. December is horrible, and 2019 is as uncertain as ever. Actually worse.

  87. @cherrylog754, but, see, that's (one of) the (many) ridiculous thing(s) about the stock market. A light trading day sets the price of a stock in the same exact way as a heavy day. The price of the stock is the price at its last trade, regardless how many shares are actually traded.

  88. Cherrylog has a good point -- this may have been short covering, not broad-based buying. The market looks very stupid, meaning that according to the action today, stocks with very good fundamentals are no more or less worth buying than those with terrible fundamentals. Why would this be?

  89. Today.

  90. The stock prices dropped so low that they became bargains and traders are buying them up. The stock market is only loosely related to the domestic economy. Whether it goes up or down tells little about the real economy that determines our domestic financial state. Most of the wealth represented by money in the stock market is not closely related to our domestic economy and it has not since the proportion of wealthy people depending upon wealth producing industrial activities amongst the rich started to shrink thirty years ago. The greater proportion of wealthy people are wealthy because securities. Exceptions in computer related business operations rely mostly upon global operations and so still don’t reflect wealth generated in our domestic economy. Anyone who fails to see from where the money comes that is invested in securities is going to misperceive what the ups and downs represent. We look at the stock market as if it were the 1960’s and try to explain how it changes using that same perspective. The stocks fund capital that is used for many purposes globally and for corporate readjustments of assets which don’t affect wealth creation in this country as it once did.

  91. Uncertainty is never good for Wall Street or the economy. This kind of yo-yo behavior, if it keeps up, will do its own damage both to stocks and the economy, with a great deal of the uncertainty not only being the crazy things that come out of Trump's mouth, but the trade policy he has embarked on. That has already cost jobs and factories to close, not to mention not one single grain of soy sold to China. Trump is on the warpath for a whole lot of reasons. He isn't the kind of man who will, for even a moment, stop to think about who else he takes down with him. --- Things Trump Did While You Weren’t Looking

  92. The markets figured out that Trump is not serious about his threats & that he doesn't speak for the government. Is this good news? We have a president who knows nothing!

  93. So what I would like to know. How many members of the government and other elites bought up the stocks when the value had dropped and now have made a quick profit when they rebounded. We should all believe that everything that is happening now is all a coincidence. The government shutdown, the actions of the federal reserve in raising interests rates, the strange statements of the Secretary of the Treasury which caused the markets to drop and now the sudden rebound. This wasn't planned by the elites that run our country.....Sure, Sure...Anyone interested in a bridge?

  94. Only if one believes in market timing (I don't). No one can guarantee a bottom (or a top for that matter) to the market. It might continue rising tomorrow, or it might fall again. Who knows? Hint: no one. Buy and hold low cost index mutual funds; diversify; and keep calm. I've lost big bucks this time around (in retirement), and have before). It always comes back, sooner or later.

  95. @Darryl B. Moretecom - The government shutdown is scarcely a secret. Anyone can buy stocks when the market is down, and some of them do make money. The stock I bought this morning went up nearly 3 points, so I made a big.....$266!

  96. @fFinbar "members of the government and other elites" members of the government like the DMV clerk and the post office carrier? Which Illuminati in the National Forest service do you figure can time the market?

  97. Wow the stock market has begun to rise again. Hopefully it will peak like it did in January 2017. But I will take it with a pinch of salt because and balance my retirement portfolio with further diversification by increasing the fixed income portion of my portfolio while waiting for the stock market to recover another 10%. Currently some CDs are around 3% for 3 years. Glad I did not enter any panic selling. As I said before nothing to fear but fear itself when the recent stock drop caused panic selling. Glad I stuck to my principle and did not sell at a loss. Remember the Kotwal principle you have not lost anything until you have not sold at a loss.

  98. @Girish Kotwal I meant to say in the second sentence of my post above January 2018 when the stock market peaked nit January 2017. Sorry for the typo.

  99. The markets were up today, but nothing has really changed from last week. Except the stocks were cheap and got bought back by corporations.Prices rising is just one part of the volatility, which will continue. I don't have the stomach for it so I sold most of my equities. Until the volatility stops, it's high yield savings and CDs for the win.

  100. If you have a President who is emotionally unstable, you will wind up with an unstable economy.... it doesn't take a genius to figure this out. Also worth mentioning is the damage Donald Trump has done internationally - it will take years for us to heal the wounds that he has inflicted on our allies , this will be long after he will have been remembered as the worst nightmare in American history.

  101. What % of trading is done by algorithms and how much by humans these days?

  102. Retail is all human. I don't think hardly any institutional is.

  103. Markets thanked Trump for leaving the country with the biggest single day gain ever. I’m sure if someone did a regression on stock market gains with the first day of Trump being out of the country, there would be a really good fit.

  104. I was curious about the point that was brought up in the second-to-last paragraph, saying rising interest rates on bonds or savings accounts could make investments in stocks less appealing. My initial thoughts are that higher interest rates in other financial markets would make the stock market more appealing. Are they saying this would be due to the market potentially having less capital to invest? Or possibly less trust in the market due to declining returns elsewhere? Any insight on this would be greatly appreciated.

  105. @Steven If interest rates on bonds rise, they become the more desirable investment and so demand for stocks falls. This pushes the price down. The actual market mechanism is that stocks have to offer a rate of return that is competitive with the higher interest rates on bonds. The only way that can occur is if the price of stocks falls so that the expected return on the investment in stocks rises (i.e., you pay a lower price for the same expected future earnings of the company).

  106. Reply to Steven from Florida: They say higher interest rates make the markets lower because that makes bonds look like a better investment than they were "last week." Like, if the market goes up a few dollars in the stock you own, you've made money but that's imaginary till you sell. Buying a bond that pays 1% or putting money in a bank bond that pays even less is risk free but hardly worth the time. Buying a bond that pays 10% is way more desirable and lots safer than buying a stock. As interest goes up, risk averse people like those living on a set amount a year are happier to have a sure thing. It's better in general to have some of each way to invest available, of course, but making bonds pay decent interest draws stock market money away at first. The other point: when we have such a big debt burden as a nation, we have to pay good interest to get anyone to buy it.

  107. @Steven Higher interest rates mean bond-buyers will earn more on their bonds.

  108. And it could be down 1000 points tomorrow on the slightest bit of negative news. Blame Trump for this volatility. He likes turmoil, and it affects almost everything.

  109. The Chaos theory predicts wide swings before a jam, or in this case a fall. Traffic kind of works the same way without the removal of blockage.

  110. This is what is known as a "Dead Cat Bounce". The US markets are up to the same level as last Friday's opening. This one-day rally doesn't change anything. None of the underlying economic / political problems have been resolved. These include 1) Tariffs and a Trade war with China; 2) 2X overpriced stock values based on Shiller P/E's ; 3) impending Feb 2019 "debate" about raising the nation's debt ceiling; 4) the $1.5 Trillion tax cut that benefits the 1%; or 5) the March 2019 Hard BREXIT when Britain crashes out of the Eurozone. If you're retired or within 10-years of retirement, Sell the Rally is the only responsible action an investor can take. Let the traders and speculators play without your retirement money.

  111. Please give credit where credit is due. The relentless bashing of the President and global uncertainties trumped up by the media (Syrian pull out for example) made the market jittery. President had a resoundingly calming message that he was not going to be intimidated or forced to withdraw from his promise of making the southern border strong. Caravans are not breaching the border forcing the US into a third world country as countries like France have found out by accepting the hooded masses masquerading as refugees. And, the market rebounded. What a Christmas present! Thank you, President Trump.

  112. There are many factors in the stock market. A butterfly flaps its wings in China can cause the market to crash.

  113. @Appu Nair The caravans never would have breached to border. Under Trump, Obama, or Bush. You need to come down here to San Diego and see the real walls that exist already.

  114. @Appu Nair Like the president you are clueless. He is a lying con man. Threatening to extend the Trump government shutdown for months and firing his personally appointed Fed chief is a "resounding calming message" over a measly symbolic $5 billion dollars? When have caravans breached our borders? Under Obama--NO! Deficit spending and fighting to keep the coal and other antiquated industries, will turn us into a 3rd world country before any illegal immigrants will. Good Luck!

  115. The real reason for the market's swoon is not Trump, criticism of Jay Powell, rising interest rates or even the China-U.S. trade tensions. The reason for the decline is Wall Street apprehension over the incoming "democratic socialists" (an oxymoron if there ever was one.) Let the War on Wealth begin, with the NYT Commenters, I'm reasonably certain, as Cheerleaders.

  116. @Connecticut Yankee So how do you explain the 1,000 pt gain today, as we edge ever closer to the democrats taking control of the House? From where I sit -- which isn't Connecticut -- the roller coaster stock market has everything to do with a presidential Twitter feed and some of the worst policy decisions this country has ever seen. Perhaps one of the remaining "advisors" to this president can help explain to him how Twitter musings of firing the Fed Chair have significant ramifications.

  117. @Connecticut Yankee So, how do you solve the deficit, infrastructure, healthcare, and defense without at least an examination of tax revenues and sources? Such a tired old mantra. Let's just cut taxes to zero and watch our economy soar? Is that how it works?

  118. @Connecticut Yankee: The wealthy began their War on Everyone Else two years ago, when they helped Trump get elected, installed themselves in the cabinet, infested the federal government, and bought themselves a giant tax cut as a reward. The democratic socialists are going to save the economy for everyone else - from the predations of the wealthy. Keep on pretending that y'all are the victims, though! Everyone Else - who are coping with unaffordable housing, healthcare, and education, along with decaying infrastructure - knows the wealthy started this war.

  119. Is it just a coincidence that the current occupant was out of the country on the biggest gain in Dow history? Something tells me it was not. The tweets were silent and the market responded.

  120. Nothing makes the "Market Move" like a $64 BILLION dollar buy back of Equities to make sure Corporate Earnings are high - can't have those bonuses to the Execs below par…poor guys… According to Wells Fargo, "the huge, end-of-quarter buy order was precipitated by the jarring divergence between equity and bond performances both in Q4 and the month of December…As a result of this need for massive quarter-end rebalancing, corporate pensions would need to boost their equity portfolios by as much as $64 billion into year-end." Otherwise, they'd be "looking at a historically large outflow of about $57 billion." So much for reassuring blather from retailers, the White House, Moscow (I'm surprised Putin wasn't blamed for something…) and Wall Street. Pure manipulation from the Plunge Protection Team, Wells Fargo and the Fed…

  121. This was just a warning shot across the bow! The real downturn is coming and is inevitable under the policies of the Republicans and Trump. Do you think we are going to get away with cutting taxes/wealth redistribution to the wealthiest among us and exploding the debt with $20 trillion owed already and no plan to pay it off? A trade war with China ,where they have the means to target individual industries like our soybeans for retaliation and our president targets steel and coal and is clueless about the global economy? No infrastructure spending and a corrupt republican party that railed about a balance budget for 8yrs of Obama's presidency but "balanced budget" has disappeared from their vocabulary overnight. Military spending uncontrolled and Defense budget that can't pass a basic audit but is increased annually without restraint? Dream on!

  122. Today's record market rally is a clear sign from investors that the smart money is voting for an independent Fed, and with it, Powell, at NOT Trump's white house carnival. The sooner his aides get him to stuff a sock in it, the sooner the markets globally can begin an upward trend. Unfortunately, we can't all hold our breath for that to happen. Tomorrow is the last day for normal-way tax loss selling. From there, maybe January effect if the shutdown is resolved.. After that, probably a lot of chop at best, and substantial risk of more downtrend if chaos continues to reign in the White House.

  123. This is bizarre. The stock market is broken thanks in large part to computerized trading. It is no longer a rational institution that is useful for economic projections. What will fill its place?

  124. @Penchant It has been strictly a gambling game for many years.

  125. Been posting this since sept: The economy is not humming, it's on a crash trajectory. I mark January 1, 2018 as the official end of Obama's economy and the beginning of the next economic crash trajectory. Few supporting reasons: 1) corporate taxes were reduced by one third 1.1) creates artificial step increase in corporate performance without an actual increase in performance. (if a company's tax decreased by 1 million, its profit increased by 1 million, with zero change in goods and services produced) 1.2) money was used for stock buybacks, not for investment or wage increases 1.3) huge government borrowing (from China?) to make up for lost tax revenues, injecting billions of borrowed money into the economy, running up a huge goverment debt. 2) revoke Volcker rule, allows for propriety trading (gambling) with FDIC insured depositors savings by a few rich guys with access. This (combined with buybacks) is inflating another market bubble. 3) raised taxes (aka tariffs) on the middle class, which caused frontloading, another temporary bump in the economy. 4) two thirds of GDP is consumer spending, raised taxes (tariffs) places a huge drag on this. The market is not the economy of course. Since it is not possible to time the market or the economy, it is impossible to know when the next crash will occur, but we are certainly on the trajectory.

  126. volatility like we have seen is a sign of impending negative economic change.

  127. As requested, The Plunge Protection Team did its thing today -- but there will be a HIDDEN PRICE...

  128. Per Mr. Bannister, "(The Fed regulators) do not realize how long and by how much they’ve tightened already...." And all this time, I thought that the Federal Reserve directors and staff were on top of the interest rate history. Please Mr. Bannister, send someone a text! A tweet!

  129. I'll believe we're back from the brink after weeks of normal trading, not one day. Meanwhile, for many it is time to buy.

  130. @Barbara By the time a stock market rally is reported, it's already past the time to buy. Much of the buying (and selling) is done by computers anyway, not by people analyzing the situation.

  131. @Barbara My favorite financial planner bought in big this morning,he obviously was not alone.

  132. The rich used to complain that if you taxed them too much, there would not be any rich folks to tax anymore. But what we’re finding out is if you tax them too little, the they take it all and leave nothing for the rest of us.

  133. There was one reason why investors pushed the Dow and the S&P up by almost 5.00%: Trump left the country.

  134. @slime2 This kind of comment, meant as a joke, characterizes the NYT commentariat. They've forgotten that the purpose of the government is to serve the general welfare, not to confirm or frustrate ad hominem arguments. Yes, Trump is a very troubled person. But he is the president, and his success is also our national success. Let's not put personal petty grievances above the general welfare. I've grown very tired of this tone in the NYT.

  135. @Burroughs Yes, I understand Donald Trump is the President of the United States. But the office is not the cause of all of the troubles we are in, from the loss of respect from our allies to the incompetence in so many of our cabinet positions. The current resident of the Oval Office is that cause. The consistent tone you speak of in this newspaper and the vast majority of other print and broadcast media is because of Donald J. Trump. No one else.

  136. Seems totally logical to me. Up is down, down is up. Completely consistent with everything else. Is this why Warren Buffet is a contrarian?

  137. It is a sucker's rally. The bear is not satiated and the market overvalued without the inflation of free Fed money.

  138. Happy to see all the ethically consistent individuals in the comments giving Trump his due for a temporary upward fluctuation after excoriating him for a temporary downward fluctuation.

  139. Still down 20 percent for the quarter, a bear market signal.

  140. Trump and his cronies surely love it when the market goes up & down - they buy low and sell high and make millions while ordinary people worry. Trump doesn’t care if government employees don’t get their paychecks - he’s already given his friends the biggest stock market gain in history as a Christmas present. He can manipulate the market with his crazy tweets any time he wants, and it not only offers money-making opportunities, it also provides a distraction from the Mueller investigation. He’s having fun.

  141. Every evil idiot on the planet is out to get Trump. Because he is the only politician who actually cares about the people he was elected to represent. Get out of the man's way. The community organizer had 0% interest rates during his entire tenure as president. They raise interest rates rapidly, just when he is about to leave office. There are entrenched narrow interests out to get Trump. For what it's worth this was a record one day increase for the S&P. Crush the resistance. Forget the petty bickering and all Americans, except the tiny few who have some nefarious motives, will benefit. This tiny minority will be OK too. Just not at our expense

  142. @James Celebrate while you can. History will remember the nightmare the community organizer inherited and the record, stable recovery his administration oversaw. GOP White House, Senate and House have acted in concert to undo restraints on thieving bankers and brokers passed after the prior GOP administration broke the world economy. Amazing how much damage can be done by so-called conservatives when they run the whole show. Hey, and how about that deficit?

  143. @James, Trump cares about himself only. You think this govt shutdown will be bad? The fact that investors are all going to be down for the year, will mean taxes revenues will be even lower then the low amount previously expected from "the tax cut". Feds will need to borrow big, when it shouldn't -- in the middle of a pretty good economy. Therefore expect further shutdowns, and when the economy inevitably cycles down again, we will have done nothing to reduce the nat'l debt, which will be yawning. Very shortsighted and just dumb McConnell and Trump policies.

  144. Funny what happens whenTrump leaves the country for a few hours!

  145. Maybe Trump should STAY in Iraq.

  146. Good! Glad it went down. Anything to hurt the rich and the 1%ers (narcissists, heartless, masochists, sadists) who are intentionally destroying the lives of all those below them. Teddy Roosevelt dealt with this trash 100yrs ago. So who has the guts to take them down now?! Do we never learn from 2008, 1929, the Rockefellers, war criminal GWBush regime and now the Trump Pence dictatorship etc? Remember the enemy, the 3Rs: the rich, the republicans, the religious.

  147. See! Trump went out of the country.

  148. Pearls before swine.

  149. Can somebody tell DT and friends to just shut up for the time being ?

  150. Trump left the country for awhile.

  151. For those who are about to retire at the end of the year, I am glad that they will at least recoup some of their losses on their 401K's. I have a friend who will retire in a couple of year who lost a whole year's salary because of this fiasco. We are always just a Tweet away from Trump having another disastrous effect on the markets, or just a stupid move away from Mnuchin throwing more turmoil into the markets by issuing a baffling statement to the banks.

  152. What, no tweets from DT taking credit for this?

  153. Trump was out of the country.

  154. Trump leaves the country and we a massive "relief rally." Stay away for the good of the nation. Give us a break "Dirty Don."

  155. Just fantasizing.... image how much higher the market would be if Trump had never been elected. Wow. No trade wars, no presidential instabilities, just solid, slow growth.

  156. It appears that the word has come down from the "big boys" that it's time to stop the stock slide and let the "small fry" back in the market so we can '"fleece them again"!

  157. @lftash The"big boys" toy with the little guys.

  158. All on a rare day Donald Trump chooses to travel abroad. Perhaps he should stay in Iraq....

  159. Weird. It's like Trump leaves the country and everything's great again. Hey. Maybe that's the secret to making America great again. Quick! Somebody close ALL the borders!

  160. The immediate resignation of this woefully inadequate carnival barker will be the best antidote to what ails our country and the international community. We’ve been exposed to the equivalent of two decades of incompetence and ignorance in two years. Let’s us pray for the expedited departure of the resident of 1600 Pennsylvania Avenue by the courts or the ballot box.

  161. Has anyone checked the stock portfolios of trump, his kids and his friends? Did anyone start shorting stocks not too long ago and maybe do some serious buying last Friday?

  162. When a child is subjected to a continuing chorus of negativity, told to be afraid, told that an unexpected boogie man is under your bed, it is rather predictable that when someone claps their hands and says: Boo! the child reacts with fear. No matter if the lights are on, the room is warm, and there is soft music in the background, Boo! gets its intended reaction. Today's drumbeat, the one of constant din emanating from major news sources, talking heads, talk show hosts or late night comedians...whomever, the news is afraid. Even though the economic environment is full of good news, employers are still looking for employees; companies are making money; unemployment for the usually last to be hired is at historical lows; even with lots more good news, the drumbeat afraid. The coastal elites and their noisemakers continue the cacophony of negativity because, in reality...they are afraid. Yet, they have the microphone to drown out news contrary to their viewpoint. The coastal elites and their media, from WaPo, NYT, Boston Globe on the Eastern coast to the LATimes, SF Chronicle, Seattle Times, etc on the West coast, are afraid that their narrative, their Editorial Narrative stands out as being wrong and contrary to the reality that many others can see. So, it is not surprising that organizations, geographically within the confines of such rich sources of bad news like Wall Street behave as frightened children as the Elite media said: Boo!

  163. @RiHo08 Great post.

  164. Pretty revealing and very, very disappointing that even here, even now - 12/26/2018 - even long, long after everyone who ever knew anything about the stock market learned that the White House (regardless of occupant) has absolutely no effect whatsoever on the daily buying and selling of publicly traded stocks on Wall Street. I wonder why some media still waste the public's time trying to rattle the under-educated into thinking so-and-so has inflicted this-and-that on the market, thus achieving some sort of desired negative impact. Why bother?

  165. The stock market is one of THE worst inventions. It's utterly unfair that people who are essentially gamblers are allowed to threaten the economy for the rest of us.

  166. @Joseph The only stocks a private investor should own are large cap dividend giving ones.

  167. That’s ludicrous. People who have taken long term positions in a stock and treat themselves as part owners of an enterprise have built significant wealth for themselves

  168. Look how jolly investors get when trump leaves the country.

  169. If Americans--especially DEMOCRATS--they would build a WALL around Washington to keep TRUMP OUT.. Build it fast.

  170. This is of course a small story, since it doesn't fit the narrative.

  171. The market starts the day heading lower. News breaks that Trump left the country and the Dow rockets to close up 1000. What more do you need to know?

  172. I am so glad that everything is all okay now.

  173. Will Trump praise the Fed for today's stock performance?

  174. Up 800 today? Probably down 700 tomorrow. I doubt this will stabilize anytime soon.

  175. I understand Trump has not tweeted in the last few hours . That may have something to do with today`s rally .

  176. Would it not be fairer to Trump for the headline to this article to read “ Dow Jones up more than 1000 points”. It has never happened before. An historic one day bounce.

  177. @Milton Lewis My thought too.

  178. @Milton Lewis It was the largest *point* gain ever; but we have to remember that the Dow Jones Industrial Average has risen enormously over the years. The base for that gain, the previous day's closing figure, was 21,792, not comparable to 10,000 or 5,000 or 1,000. The *per cent* gain is still very large, but not something that has never happened before. I do think your comment ends with valuable food for thought: the word "bounce".

  179. It would be great if the The Times paid as much attention to wages as it does to the stock market. According to a recent ThirdWay report, only 38 percent of American jobs pay enough to support a middle class lifestyle. Does the stock market ever take this metric into account? I suppose the money guys abhor higher wages, despite the fact that they lead to a better economy for more people.

  180. @WRosenthal: I doubt even those numbers reflect reality as where the very few higher paying jobs are the cost of living is commensurately higher: the numbers would be more meaningful if they were locally and not nationally averaged, I see very few signs of a remaining middle class as gauged by what we considered middle class in the golden age of the middle class, the fifties: a dependable, livable salary and job security, often with benefits and a pension in your future(hard to believe today but retail salespeople at Sears got retirement packages, now retail salespeople are disposable, in particular to vulture capitalists like Schwartzman, Kravitz, Icahn, Ackerman and their ilk seeking “efficiencies” and using debt to bulk up their payoffs), homeownership for a family of four on one salary, a little money in the bank, very little debt, infrastructure and parks in good repair and free, gas cheap, college available to basically everyone, ditto medical and dental care before $25k braces and million dollar hospital bills: the loss of the gold standard, Milton Friedman economics, Greenspan’s dictum” we cannot give them raises but we can give them credit” which has defined the ability to have a middle class lifestyle since the seventies onward, renting it rather than owning it, one way or the other the banks make out the rest of us, not so much. When most people can’t come up with $400.00 in an emergency I remain unconvinced there is any longer a “middle class”.

  181. Ted-the 1950s and part of the 1960s was part of a one off event. WWII had eviscerated most of the world. There was one economic power left standing. We rebuilt Europe and Japan and we benefited from those efforts. We developed a global economy that has, on balance, served the world well. And in doing so, we created competition where none existed. For the most part, we haven’t fallen behind. The world has caught up. That’s why you won’t see the ‘50s again

  182. @Mark Solomon: I completely agree Mark, globalization has indeed done a great deal for many developing nations, unfortunately my grandsons live in America not in developing nations and I feel many in my generation sold them out, after all, let’s be frank, we didn’t rebuild Japan and Germany out of generosity we did it because we remember what happened after WWI when we allowed Germans to go hungry, so rebuilding Japan and Germany was a good thing and they play on the same level or better than our own workers so that really hasn’t been a problem, actually when the Toyodas took over the plant in Fremont they were better employers than G.M., The Higashis’ didn’t live the high life like an American CEO and wife though. When we sent jobs to China though, we destroyed much of America’s manufacturing and our middle class we did it out of greed, making billionaires out of tie salesmen like Ralph Lauren, Workers be damned. I’m not convinced that turning inward won’t benefit Americans in the long run, business wise supply chains may be interrupted and consumers will pay more for all the junk they have been convinced they need, but jobs will come back and spending trillions on rebuilding America rather than fighting other people’s wars or creating problems in other people’s countries to benefit multinationals resulting in unneeded immigration would certainly be a good start to at least try to regain ground for the middle class, I assure you the alternative will be much worse.

  183. Yea for my 401K! Now let's see who does profit taking tomorrow.

  184. @Brookhawk Your 401K is not your until you retired.

  185. Never ever have I understood the relation between these numbers and real live. I always think that these numbers only refect the amount of greediness of certain people. When they are rewarded, they have stolen the money from normal people, don't you think?

  186. Well, I left Neil Irwin a comment last weekend, and I said that Wednesday was going to be a Santa Claus day, that bulls eat bears for breakfast! Neil, I hope you were paying attention! Not that I'm a market timer myself, I'm too old for that casino; but really, this market is getting old too. Look at the trend line since 2008, and you'll see that the past twelve months have been markets treading water, with enough well spaced ups and downs to keep the hedge funds afloat. Why did the long bull run suddenly hit a ceiling around 25K DJIA? What is it that the big investors and sovereign funds know that you don't? Secular stagnation is a question -- not the answer to the question.

  187. Hmmmm the Trumps leave town, FAR away and NOT to play golf: Market goes up 1000+ points....Sadly a) we need 100 more days like this and b) President Mystery Bonespurs only created temporary diversion #257 today. This trip is nothing more than that, like every other disingenuous act of his.

  188. The volatility of the stock market is obviously due to the volatility of the American president. Now that the ruling class has seen that it risks losing millions of dollars because of the buffoon in the White House, his days are surely numbered.

  189. Machines go into wild oscillation right before failure. So do markets. Until we return to sanity in the Oval Office, cash is king.

  190. The higher the bounce, the deader the cat! Happy New Year!