Another day, another sea of red on the investors screen. The
The market has lost more than $ 7 trillion in value since the beginning of 2022, and is flirting with a bear market defined by a 20% fall from a recent high.
The index will enter a good market if it closes below 3837 points. It is trading near 3900 on Thursday afternoon, down about 0.5%. Another 1% loss would push the S&P 500 below that threshold.
At around 31,250 on Thursday, the Dow Jones Industrial Average has slightly higher cushions. It has lost about 14% this year, and will enter a bear market if it closes below 29,440.
The Nasdaq composite is already in a bear market — about 30% lower in 2022 so far. The same is true of the Russell 2000, which is 27% lower than the record high set last November.
It has been a turbulent fall for the market. According to Frank Capellari, Instinet’s Chief Market Technician, there have been 78 daily 1% moves for the S&P 500 in the last 12 months, either up or down. Which increased from 45 in November.
Instability is a trademark of the bear market. Since 1970, the number of 1% shipments per day has exceeded 120 only three times a year, always during the bear market. The market is not there yet, but it can certainly feel that we are moving in that direction.
Stock sales have been the most severe in growth-oriented areas of the market. The
Vanguard S&P 500 Value Index
Exchange-traded funds (ticker: VOOV) have lost about 9% this year, however
Vanguard S&P 500 Growth Index
ETF (VOOG) decreased by 26%.
These include the Megacap Big Tech Giant, which makes up a significant portion of the market-cap weighted index, such as the S&P 500.
(TSLA) much lower than this year’s market. Worst are Meta, Nvidia and Tesla, each down 40%.
This has dragged down the performance of the cap-weighted index. By comparison, the equivalent S&P 500 is down about 14% this year.
Write to Nicholas Jasinski at [email protected]