Stock Market: What Goes Down Doesn't Then Go Back Up
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What is the main topic discussed in this episode?
With your money briefing, I'm J.R. Whalen at The Wall Street Journal in New York.
Why have down days outnumbered up days in the recent stock market?
Down days on Wall Street are much more common than up days as of late. We'll explain in a moment what, if anything, can pull stocks out of their doldrums. First, these money and market stories you should know. The number of unfilled jobs in the U.S.
Which macroeconomic and labor trends are influencing investor sentiment?
grew by 1.02 million at the end of October from a year earlier. More than a third of those new openings were in two fields typically packed with entry-level positions, accommodation and food service, as well as retail. And of the one million additional open jobs in the year ended in October, 200,000 were in accommodation and food service, the largest increase of any sector tracked. That suggests steady hiring elsewhere in the economy and unemployment holding at a near half-century low is allowing those who might otherwise seek jobs at restaurants or stores to look for higher-paying jobs in other industries. A study by the National Bureau of Economic Research says that nearly one million people filed for disability benefits they ordinarily would not have due to the recession.
The study confirms what economists had suspected, that during last decade's recession, the ranks of those who claimed disability were artificially high. Many had less severe impairments than the average applicant and also were more likely to appeal an initial denial. Of those that filed for disability benefits that otherwise would not have, about 42% were awarded benefits or more than 400,000 new beneficiaries to the Social Security Disability Insurance Program. And the next chapter in the world's cryptocurrency craze appears to be lost jobs. Blockchain venture firm ConsenSys said Thursday it would cut 13% of its staff, while Steemit, a firm that runs a blockchain-based social network, said last week it laid off 70% of its staff.
A number of smaller firms that raised money during the manic 2017 cryptocurrency rally said have pulled back sharply or quietly closed. Meanwhile, Bitcoin is down more than 80% from its December 2017 high, and the current $111 billion total market value of all cryptocurrency is off 87% from its early January high of $827 billion.
How has the cryptocurrency downturn affected jobs and market value?
In addition, about 86% of the initial coin offerings from 2017 are trading below their listing price, while 30% have lost nearly all of their value.
One step forward, two steps back. That pretty much sums up what it's been like to follow the stock market as of late. But is there anything on the horizon that could help stocks break out of its backward moving track? We've got Wall Street Journal markets reporter Amrit Ramkumar here with us with some answers. So Amrit, usually at this time of the year, we're talking about being in the midst of a Santa Claus rally. Seems like Santa sent the Grinch in his place. These really have not been jolly days for the markets.
Not at all.
What factors explain the market's sharp declines despite earlier gains?
In the first four days of December last week, it's the worst start since 2008 for major indexes. It really has been brutal for a lot of people, especially after in late November, again, we saw a pretty big rally. So people have seemed pretty optimistic coming into the month, but we've seen just the same trade tensions, fears over global growth, overhanging everything. And It's really a big change from earlier in the year. Again, a lot of people have said this is a resumption of normal volatility. But U.S. stocks did really well in the first nine months of the year. And it seems like just this last quarter, people are really catching on to some of these fears and they continue to linger and hang over everything.
So, yeah, you know, it's not just individual events that are holding the markets in check. It's these ongoing issues that are sort of casting clouds like trade, interest rates and economic growth. It's unlikely these can just magically go away.
That's exactly right. And to go back to what I was saying earlier with November, like late November, we saw the rally after the Fed signaled it might be more cautious with interest rate increases.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:05–0:09
2
Why have down days outnumbered up days in the recent stock market?
0:09–0:22
3
Which macroeconomic and labor trends are influencing investor sentiment?
0:22–2:19
4
How has the cryptocurrency downturn affected jobs and market value?
2:19–3:03
5
What factors explain the market's sharp declines despite earlier gains?
3:03–4:11
6
How are trade tensions, interest rates and Fed guidance keeping markets under pressure?
4:11–5:52
7
Why is diminished liquidity and deteriorating investor sentiment widening volatility?
5:52–7:06
8
What near-term events could help stocks recover and what should investors watch?
7:06–7:36
Speakers
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