Stocks Suffer Their Worst Week of the Year
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What happened in U.S. markets during the worst week since December?
With your money briefing, I'm Charlie Turner in New York for The Wall Street Journal. U.S. stocks rebounded from their session lows Friday but still ended with losses. And the markets have now fallen for five straight sessions. They were 0 for 5 this past week. The Dow Jones Industrials closed down 23 points Friday at 25,450. The Nasdaq Composite fell 13 points. The S&P 500 lost 5. For the week... The Dow, Nasdaq, and S&P each lost more than 2%.
Why did stocks fall for five straight sessions and which indices were hit?
Mike Worsthorn covers the markets for The Wall Street Journal, and he joins us in the studio. Mike, this week was the worst week for stocks since December. Investors really seem to be worried about the global economic performance.
You saw this re-emergence of fears that really attacked the market all throughout the fall. And it all started throughout the week when people were just getting signs that a trade deal may not be so close. That filtered as Europe announced new stimulus measures where it just made investors feel that, you know, indeed, maybe they're not giving enough credence to the fact that economic growth is slowing more quickly than expected. I think the big question is, ever since we started this rise in January, was, are we being over-exuberant about the market's rise? That was followed with data out of China, as well as then, of course, Friday's jobs number, which all just goes to show that growth isn't as good as it was, and now we're just trying to figure out, how good is it not going to be going forward?
The decision by the European Central Bank to hold interest rates steady and also, I guess, to issue loans, cheap loans to banks, a reemergence of a big stimulus program, I think that caught global investors by surprise.
It did, and there is this debate now, or at least this question of, A, is the ECB overreacting, or is it not moving fast enough? Investors really can't make sense of it, because they've just been dealing with so many of these cross-signals, whether it's from the U.S., from Europe, or from Asia. What you're starting to see, though, at the very least, is a narrative forming within the market that, indeed, growth is slowing down. that there's going to have to be measures taken or at least not taken by some of the central banks if they want to stave off maybe a further economic turmoil at this point. But the question is, I think facing investors, is if you're in a market right now, how do you price that in at the moment?
Because the growth isn't going to stop tomorrow. It's certainly not. I mean, the U.S. economy certainly is growing, but it's going to stop at some point. It's all going to slow down. So I think it's sort of the searching process of if it's not today, when is that going to be exactly?
I've been informed that the bull market officially turns 10 years old on Saturday. It seems like the bull is walking with a limp. Are we at a turning point for the market, especially in the wake of Friday's weak job growth number? I mean, is the rally over, or does it still have legs?
I mean, if you look at it just sort of in the span of just this year, you could say that we may be facing a turning point in terms of how this year could continue to play out. Because especially since the end of January, investors have been saying that we expect volatility to return. They just didn't know what the catalyst was going to be. And we saw last week with weak economic data all around the world as being that catalyst. In terms of the bull market, though, I mean, I think December was a really good example to show investors that how close a bull market could come to dying and how quickly that can happen. You know, that December 24th Christmas Eve sell-off, I mean, it was within less than half a percentage point of ending that bull market.
So, we were almost there. And we're really not out of the woods. We haven't hit that new high yet.
How did global growth fears and trade-talk setbacks trigger the market sell-off?
So, we're really not – I mean, a lot of the major indexes aren't really out of that, I guess, correction mode that we've really been stuck in since September.
Right.
Well, what are investors watching for next, Mike?
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