Look Out Below

We are now officially in a bear market:

Wall Street’s record-breaking 11-year “bull market” came to an end on Wednesday as fears about the spreading Covid-19 pandemic hit stock markets again.

US stock markets have been on an unprecedented streak since 2009, a bull market of gains. On Wednesday investors sold off shares across all sectors after the World Health Organization declared the outbreak a pandemic for the first time and criticized “alarming levels of inaction” by governments in corralling the virus.

The Dow Jones Industrial Average closed down over 1,400 points, 5.8%. After days of wild fluctuations, the Dow has now fallen 20% from its most recent highs – finally signaling a bear market. The S&P 500 also fell and is now 19% below its recent high.

I would note that the bulk, if not the totality of all net stock purchases over that period has been stock buybacks.

This is long overdue, and luckily, it's happening during an election year with an incumbent Republican.