I’m seeing a lot of talk today about a stock market correction. What’s up?
Ten percent correction
The S&P 500 has now suffered a 10% correction from its July 31 peak. This is the first such correction since the market bottomed on October 12, 2022.
I’m surprised I don’t see any red headlines on this topic. It shows me it’s not a big deal.
Then… the decline will continue… pic.twitter.com/R2HjEPHnJD
— Jim Bianco (@biancoresearch) October 27, 2023
Official correction
BREAKING: The S&P 500 has officially entered correction territory and is now 10% below its July high.
This means that the market is now down 10% since the exact date the Fed removed a recession from its forecast.
The S&P 500 has lost over $4 trillion in market capitalization since July.… pic.twitter.com/QYT4800B4x
– The Kobeissi Letter (@KobeissiLetter) October 27, 2023
I see a lot of headlines, including the Wall Street Journal.
S&P 500 and Nasdaq
Market update:
1. S&P 500 and NASDAQ both officially enter correction territory.
2. 2/3 of S&P 500 stocks are trading below the 200-day moving average.
3. MSFT, AMZN, META, GOOG all beat earnings expectations.
4. US GDP rises +4.9% in Q3, twice as expected.
5. Cathie Wood says…
— Genevieve Roch-Decter, CFA (@GRDecter) October 27, 2023
Jim Bianco says: “I’m surprised I don’t see any red headlines on this issue. It shows me it’s not a big deal.”
I’m not sure if this is screaming, but the Wall Street Journal headline says: Stock Market News, October 27, 2023: S&P 500 ends lower, enters correction.
The position in the WSJ was #2.
The S&P 500 follows the Nasdaq, which ended with a correction earlier this week.
The week was marked by even bigger swings beneath the surface, from tech heavyweights to oil giants.
Alphabet’s earnings disappointed investors, sending the stock down nearly 10% this week, its worst since November. Chevron shares fell more than 13%, their worst weekly decline in more than a year, after the company reported significantly lower quarterly profit than a year earlier.
JPMorgan shares fell after Chief Executive Jamie Dimon said he would sell the bank’s shares in a major way for the first time since taking over nearly two decades ago.
Bear market resumption correction?
A common definition of a correction is a 10 percent decline from a recent high, but in my opinion this seems more appropriate for a bull market or an upward correction in a bear market.
Correction table
S&P 500 chart courtesy of StockCharts.Com, notes by Mish
Is this the right way to look at it or is this the lead chart?
A correction should mean a countertrend, but the trend is bearish. Therefore, I suggest that the correction was the rally.
I assume we had a 32% bear correction higher and the bear market has resumed.
In long bear markets, rallies of 50 percent or even 100 percent are common. Until a new high is reached, it is a mistake to assume that a new bull market has begun.
According to Yellen, higher yields reflect the strength of the economy
Please note that According to Yellen, higher yields reflect the strength of the economy and IRA success, not the deficit
Is this correction just another expression of the strength of the US economy?
Gold and Bitcoin Are Soaring, Treasury Bonds Are Soaring, What’s Going On?
Also note the rise in gold and Bitcoin as Treasuries have plunged. What’s up?
The bond market is under pressure along with stocks, but gold and Bitcoin are on the rise and have been largely acting in tandem for months.
You can root for Yellen if you want, but I don’t think the economy is doing that well. Inflation is certainly like that. And so deficit spending helps create an artificial boom.