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This Week's Stock Market Selloff Looks a Lot Like 2008. Here's What Could Happen Next.
 [Barron's] The stock market’s latest selloff triggered by coronavirus fears looks eerily familiar. The S&P 500 has been tracking a very similar course to what it did in late September and early October 2008 at the beginning of the financial crisis, according to Nicholas Colas, co-founder of DataTrek Research.March 2020 is so far "reliving 2008 in virtual lockstep," he wrote in a Thursday note to clients. The S&P 500 dived 7.6% on Monday‐its first one-day drop of more than 5% since the end of the financial crisis‐and then registered a 4.9% gain Tuesday. That is about a 65% recovery. On Sept. 29, 2008, the index dove 8.8%, and then climbed 5.4% the next day, also a 61% recovery. Then this week, the S&P 500 tumbled 4.9% again on Wednesday and dived more than 7% on Thursday afternoon. On Oct. 1 and Oct. 2 in 2008, the index fell (though less steeply), by a combined 4.5%. "While we do not believe the S&P 500 will have a +50% drawdown this time around, the narrative around equities is similar enough to merit direct comparison," Colas wrote. Posted by: Besoeker 2020-03-13 |
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