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May 10, 2004
Sell!

As of this moment, the DOW is back below 10,000 (9990.2 at close).

It's been dropping for weeks (today's drop puts it down 4.42% for the year), but there's something of a shock in seeing the numbers move under five digits.

(A sort of "there goes my retirement...again...shock.)

NASDAQ is down.

The S&P 500 is down.

The NYSE composite is down.

The Fortune 500 is down.

Things I never even heard of are down.

This is the kind of moment that makes me glad high finance is a closed book to me. If I were an expert, I might be concerned.

Posted by AnneZook at 02:10 PM


Comments

Hmm. What does the market "know", and when did it know it?

I'm guessing that the institutional investors (whose movements mostly account for any shift in the market) are betting on higher energy costs producing inflation and slowdown in the short and medium term. Energy is a pretty inflexible cost for most corporations, and a big factor in total production cost, particularly for computerized and motorized services.....

Posted by: Jonathan Dresner at May 10, 2004 04:53 PM

That's a more considered opinion than mine. I assumed it was either more profit-taking or a reaction to the burgeoning scandal about Iraq.

Posted by: Anne at May 10, 2004 10:20 PM

Well, it could be reflective of concern, raised by the scandals and lack of progress, over whether the fundamentalisticly pro-business Bush will be elected over the merely enthusiastically pro-business Kerry.

Though, as my wife and I noticed a long time ago, it could just be the typical perversity: when job figures get better, the market gets worse, because bad news for workers is good news for business.....

Posted by: Jonathan Dresner at May 11, 2004 12:40 AM

What I find interesting is that Big Bizness, that Bush reportedly loves, don't seem to love him back. There have been some positive market reactions to some of the Bush Administration's policies but for the most part, every time the man opens his mouth in public, the market seems to go down.

It's odd, that's all.

Posted by: Anne at May 11, 2004 07:44 AM

I think business tends to react to reality rather than rhetoric. If someone is driving the economy into the ground, the market will reflect that. Bush is deficit spending as if this is 1932 and the world is full of protectionist, nationalist trading blocs, and America has the world's largest trade surplus. Of course, in reality, it is 2004, and instead of having the world's largest trade surplus, America has the world's largest trade deficit, so a good chunk of any fiscal stimulus is wasted because it simply goes overseas. More so because trade is more global and less protectionist.

Posted by: Lawrence Krubner at May 12, 2004 01:07 AM

I think that in the long run the market does react to reality. But those sudden, one-day drops happen in response to major news items sometimes.

With the Europeans suggesting they'll drop protections if we drop protections, the market becomes more and more "free" wich is a bit worrying. Completely free markets can lead to things like depressions.

Posted by: Anne at May 12, 2004 07:55 AM