The 1% Streak Comes to an End

The S&P 500 fell over 1% today for the first time since October 11. The index amassed an impressive run of 110-straight days without a 1% loss. In fact, there were only two losses that exceeded 0.7%. This is the longest such streak since 1993.

Today, however, the index dropped 1.24%. From a larger context, that’s hardly a terrible loss. Not that long ago, losses like that happened all the time. But in our placid market of recent months, it’s an outlier.

The losses were not evenly spread out. The banks, for example, took it hard. Bank of America was down 5.8%. Morgan Stanley dropped 4.3%. Our own Signature Bank lost 4.2%. BAC usually has the highest volume of any stock but today it had its highest volume in four months. Interestingly, there was no news today specific to BAC.

Outside the banks, it really wasn’t that bad a day. The staples were down slightly and the utes were up. Whenever you see the financials and utes move in opposite directions like that, you know the market is debating short-term rates. Today was a strong move in favor of those thinking short-term rates will stay low for longer. I don’t know if they’re right, but they had control of the markets today.

In the futures market, the odds of a June rate hike declined from 58.3% to 54.0%.

I saw plenty of commentary saying the market fell for this or that reason (Trump, taxes, healthcare, North Korea). Call me skeptical. The healthcare stocks didn’t move that much.

Posted by on March 22nd, 2017 at 12:55 am


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