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By Nicholas
Jasinski | Wednesday, September 23 Dropping. U.S. stock
indexes opened in the green today, before spending the remainder of the
session moving in one direction: down. The same dreary themes from earlier in
the week continued to sink in. Coronavirus case growth globally has
accelerated once again, prompting additional new restrictions on economic
activity in some countries and cities. In the
U.S., meanwhile, Federal Reserve officials have had a busy week of
speaking engagements and congressional testimony. They've emphasized that
monetary policy will remain loose and supportive for the foreseeable
future—but that that's not enough. Low interest
rates and bond-buying programs can make it easy for companies to borrow money
and stay afloat, but they can't create demand. That takes fiscal policy, and
right now there seems to be little chance of compromise on a stimulus bill in
Washington. “The
narrative that now better fits the fact pattern, in our view, is that both
parties see less risk with ‘no deal’ than a deal on the other’s
terms,” Morgan
Stanley’s head of public policy
research, Michael
Zezas, wrote today. All 11
sectors of the S&P 500 fell today, with the index losing 2.4%. The Dow
Jones Industrial Average declined 1.9%, while the Nasdaq
Composite dropped 3%. It's six
months to the day since stocks bottomed on March 23, Ben
Levisohn noted today. And what a rally it has been:
Even after today's drop, the S&P 500 is up 45% in the past six months. It's now
about flat for the year, up 0.2%. "Knowing what we know about 2020, that
doesn’t seem too bad," Ben wrote. And the
historical odds say there's something to look forward to as well. Since 1933,
the S&P 500 has surged at least 40% in six months just eight other times.
In seven of those, the index was even higher 12 months later. |
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DJIA: -1.92% to 26,763.13 The Hot
Stock: Nike +8.8% Best Sector:
Energy -4.5% |
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