The S&P 500 officially placed the benchmark index in the Bare Market territory, down 4% shortly after trading began on Monday. Later they reversed some of those losses. However, if the market closes its way of opening, Monday could be a truly historic day for the stock market, but in a good sense.
If S&P closes more than 4% on Monday, that would be the third consecutive trading day that recorded a 4% decline. And it is the first time the S&P 500 has experienced three consecutive declines in almost a century since the stock market crash in 1929, when the S&P 500 marked the onset of Great Fear Presion.
Last week’s announcement by President Donald Trump Clears tariffs on almost all American trading partners We sent stocks into the worst week due to the height of the coronavirus pandemic. Stocks had the worst day of five years on Thursdayafter that I did that again on Friday.
The bleeding continued on Monday. Just after 10am, the S&P 500 dropped by 2.3%, cutting losses by 4%, which joined the high-tech Nasdaq composite in the bare market (down over 20% from its recent peak). NASDAQ was 1.6% off, while Dow Jones Industrial Array Array Array Array Array Array Fair fell by 2.7%.
Stocks plummeted overseas, with Hong Kong’s major market index surged 13% on the worst day since the 1997 Asian financial crisis. Stock prices also fell sharply in Europe.
Trump, who spoke rebelliously in response to the selling of the expanded market, reiterated late Sunday that his trade policy would bring about the systemic changes needed for the US economy.
“I can’t tell you what’s going to happen to the market,” the president told Air Force 1 reporters on his way back to Washington from his weekend in Florida. “I don’t want anything to get off, but sometimes I have to take my medication to fix something.”
Bill Ackman had a warning to Trump Sunday: Pauses in a trade war on risks that will crash the economy.
“The country is 100% behind the president by modifying the tariff system that puts the country at a disadvantage,” says Ackman, billionaire CEO of Pershing Square Capital Management. I said in a long post on Sunday X. “But business is a game of confidence, and confidence depends on trust.”
“By placing large, unbalanced tariffs on friends and enemies, and thereby launching a global economic war on the whole world at once, we are in the process of destroying our confidence as trading partners, as places to do business and as a market for investing capital,” continued Ackman. “The President has the opportunity to call a 90-day timeout, negotiate and resolve unfair asymmetric tariff transactions and induce trillions of dollars to new investment in our country.”
“Or alternatively, we are heading towards a self-induced economic core winter. We should start walking around,” he added. “The cooler head wins.”
