A Volatile Week Marked by Uncertainty
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How did U.S. stocks perform during this turbulent week?
With your money briefing, I'm Charlie Turner in New York for The Wall Street Journal. Stocks ended mainly lower Friday and more volatile trading. It capped an incredibly turbulent week for the markets. On Friday, the Dow Jones Industrials fell 76 points to 23,062. The Nasdaq Composite gained five points and the S&P 500 fell three. Each index ended a three-week losing streak. The Dow rose 2.7 percent for the five days. The Nasdaq jumped 4 percent. The S&P gained 2.9 percent. Joining us in the studio is Wall Street Journal markets reporter Jessica Menton. Jessica, the markets seem to pull out of its funk with a powerful rebound starting midweek. Of course, that included the Dows' record gain of 1,086 points on Wednesday.
But I guess that Friday's late wobble reminded us that uncertainty is still the name of the game.
Absolutely. It has been this way for quite some time during this quarter, especially on Fridays. I've just noticed the market tends to sell off a little bit in the final hour of trading going into the weekend as people want to take risk off the table, different things like that. But I was actually more surprised that the market didn't finish lower than it did today. So I think that is a positive sign.
And we should say that, you know, despite these recent gains, the indexes are all poised for annual losses for the first time since 2008, a full decade. And the blue chips and the S&P are on pace for their worst December, the worst final month of the year since 1931. That's unbelievable.
It really is. And another little factoid for you, not only for that December, but just in general, if you're looking at the worst months, the Dow and the S&P are down 9% for this month, and that's the worst since February of 2009. Now, that's during the height of the financial crisis, something that's a little bit interesting with a lot of people that I've been talking to, especially with the volatility this week. They kept reiterating that The last times, if you look back in history, where we see this kind of movement has been during crises. And we're not in one right now.
I thought that was interesting. You quoted one market analyst, one investor as saying that he really couldn't understand why there was such panic selling at this point, given that there really is no crisis. You know, despite the prediction for the economy slowing down, the economy is still strong. And, you know, that's fascinating. But I guess it's the fear of the unknown and the fear of what might happen that sort of overpowers that.
Looking into 2019, that's what a lot of the different analysts, investors that I've spoken with have also said. There's just a number of different uncertainties if you look at the Federal Reserve and the rate path, trade tensions, global growth concerns, and whether or not the U.S. can continue to be the standout against other economies globally, like it was in 2018, the question mark continued. is basically, can we still be the strongest one in the room?
Yeah. Of course, another thing driving the volatility is the light volume due to the absence of traders at year's end, and that sort of exaggerated everything.
Yes, that was definitely a part of that, as well as different margin calls. But still something I thought was interesting, if you looked back to last Friday and Monday, typically you wouldn't see the type of volumes that we see.
What caused the midweek rebound and the Dow's 1,086‑point surge?
And we are. And to your point, I think a lot of the moves to the upsides and the downsides are just there's not as many players in the market, different traders, human traders. This is kind of what someone was explaining to me earlier earlier. So when you have a lot of this algorithmic trading that's trading on a lot of headlines, you'll see those big swings like that.
Do investors see the beginning of the new year as an opportunity to step back into the market and buy some beaten down stocks?
So if you look at a lot of the sectors that have been beaten down, particularly energy because of what we've seen in the commodity space and oil being in a bear market, even though it's been beaten down, I have spoken with a lot of wealth managers that have still been buying shares because they think the valuations look attractive.
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