Could Have Been Worse. U.S. stock markets were closed Wednesday in honor of the late President George H.W. Bush. On Thursday, the three major U.S. indexes, spurred by the arrest of Huawei CFO Meng Wanzhou in Canada and renewed worries about trade, fell deeply into the red. The market recovered most of the lost ground, however, before the day ended. The Nasdaq Composite even managed to claw back to the positive territory. In today’s After the Bell, we…
…wonder whether investors have been overreacting to the headlines; …compare this year to 1987 and 2007; …and look at one indicator that the bear might not be that far away.
Sense and Sensibility
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The S&P 500 has rallied 4.8% last week before dropping 2.3% so far this week. The outsized selloff, however, might be exacerbated by algo-trading and volatility fund, which is not reflective of the fundamental realities, writes Tom Essaye of the Sevens Report on Thursday.
Worries about the next round of trade talks, in particular, was unwarranted. “The whiplash on this issue this week is simply incredible,” writes Essaye. “Markets were euphoric on Monday and