Social disruptions – closing schools, borders and so on – related to the CoVid-19 pandemic are now the dominant story but the financial angle remains the a big second story in most newscasts.
In stock market terms, a correction is when stocks drop 10-percent. A fall of 20-percent is what they call a Bear Market. We have a bear market with declines in the 30-percent range.
Historically, when we get these kinds of downturns it is associated with a recession. We don’t have one yet – at least not officially – but it is pretty clear we’ve hit that territory. And, if nothing else, the market has priced in a recession.
The only good news in this story is that bull markets – ones that go up for an extended period – are long. Bears are short. The bull market that ended a week ago, for example started exactly 11 years ago…to the day.
At the pace we’re moving right now – with 10-percent drops daily – we’re quickly on our way to finding a bottom in the market right now so the Bear will be tamed relatively soon…perhaps in days compared to years for the Bull.