Volatile Dow closes up 567 points on day of sharp swings

The Asian markets too came back from the brink, following a hefty bounce in the Wall Street.

The Dow Jones Industrial Average rose 378.68 points, or 1.52 percent, to 25,291.45, the S&P 500 gained 32.48 points, or 1.21 percent, to 2,727.62 and the Nasdaq Composite added 54.36 points, or 0.76 percent, to 7,170.24.

Mark Haefele, global chief investment officer of wealth management at UBS, said in a note that the bank does not believe that now is a time to reduce exposure to stocks.

One natural reaction to increased volatility is the inclination to get off the wild ride and sell. “We just hadn’t had too many downs recently”.

First, am I concerned? No. “They hate Wall Street”.

Despite worries about interest rates, they still see a recession as a long shot. The result is waves of selling. The Hong Kong market rose 10% in the month: Brazil did even better, rising by 11%.

However, those relatively small percentage movements overnight were closer to what markets expected, compared to the Dow’s 4.6 per cent (1,175 point) drop earlier this week. I’ll never forget it, and I’ll never forget the lessons I learned from it.

Federal Reserve Bank of St. Louis President James Bullard told reporters after a speech in Lexington, Ky., that “this is the most predicted sell-off of all time because the markets have been up so much and they have had so many days in a row without meaningful down days”, Bloomberg News reported.

Chipotle Mexican Grill slumped 8.8 percent after saying it expects customer traffic to continue to decline.

Anyway, Monday’s drop at one point was almost 1,600 points, following a decline of 665 points on Friday. They’re inherently risky investments, and investors should be prepared to see drops of 10 percent.

Investors often buy gold when they’re anxious about market volatility, but they aren’t doing that now. Its latest appearance, in my view, isn’t another financial crisis.

Beginning immediately after his 2016 election all the way through last week’s State of the Union address, the president repeatedly claimed credit for a surging stock market and increases in Americans’ retirement saving accounts. And if you say one is coming often enough, when it does come you’ll look smart for having said it. That was the exact opposite of the exuberant buying in January that drove stock prices to record highs and made the market more vulnerable to a change in investor sentiment.

Earlier this week stock markets around the world suffered sharp falls.

According to valuation measures such as the price-to-earnings ratio, stocks are significantly overvalued in historic terms. That’s a long way from bubble territory. Shanghai and Shenzhen closed down 1.8 and 1.2 percent respectively.

The pan-European FTSEurofirst 300 index rose 2.31 percent and MSCI’s gauge of stocks across the globe gained 1.06 percent. Investors are anxious about evidence of rising inflation in the U.S. Increased inflation might push the Federal Reserve to raise interest rates more quickly, which could slow down economic growth by making it make it more expensive for people and businesses to borrow money. Indeed, the market has shown sustained growth over the past several years.

Even if you don’t own shares directly, the chances are that you will be paying into a pension which is invested in shares and bonds.

“I think that can be a healthy thing”, he said.

Investors who want less volatility should be in bonds, savings accounts or other investments with less risk.

A significant portion of market gains has tended to occur during short periods of time. Well, just stay away from the market.

Mr Lucas said investors would now be looking to the company reporting season, which was expected to deliver positive news.

And remember, panic is not your friend.