Dow gave up 160 points. S p dropped 1. 25 . The difference is stark. And as you will see throughout this show, ive been adamant that the ipos, endless insider selling, and valuations on sales, not earnings, are all making it, so we dont have a clue where the nasdaq bottom might be, although i remain somewhat sanguine about its dow brethren. Worse, its become clear that many people are overextended, meaning theyre borrowing a huge amount of money to buy stock. Let me be very clear about something. I dont care what you say about margin buying. If youre doing it, and i know its a record level, youre wrong. Recognize that you can borrow money to go to college or buy a house, but you should never, ever buy stock with borrowed money, which is why im starting next weeks game plan with a marching order. As tempted a as you might be to buy a host of fastgrowing companies, i find it somewhat tempting myself, you must sell, not buy stocks on monday in youre using margin debt. The figures are real
Equities have referred pain from the bond mark all week. Today was no different until a Late Afternoon rally broke the pains vice grip with the dow only gaining 45 points, s p advancing, and nasdaq climbing 4. 2 . A pretty nice day for the bulls in the end. What exactly has been happening here. We have a combination of weird data. Meaning that rates keep going down, whether we have positive data or not. Any good data shoo send rates shooting up, people. In inflation data thats shot should be sending rates up. The paradox,s epicenter of the injury is referring pain to the stock market, some sort of bizarre feedback loop. Bonds are saying the economy is weak, so therefore stock market traders are saying all stocks must be doing weak. All Companies Must be doing weak. The bond market is never wrong. Hey, listen, it makes no sense, except when you consider that so many people trade etfs these days rather than individual stocks. The etfs create a gravitational pull that can drag down any st
Why the heck is that news . Cmon, man. Ever since the great bull market of 1982 began 15,000 dow jones points ago, investors struggle to digest fresh fears. Dow ultimately gaining five points, s p advancing just 0. 8 , and future were down last night, what truly is a shame is this kind of evergreen story is now a staple to so much business journals. It costs people so much money. These pieces have caused a steady departure of individuals investing in stocks, in large part because they dont understand the fears do get digested, and when they do, stocks can rally. So i want to use in as a chance to talk about how risk and how how risk and stocks per se are risky assets, but you cant get it any reward without some risk. There are many kinds of fear, but only some are actually worth worrying about. Sell sell sell. For example, 2008. Sell sell sell. We had true Systemic Risk, which it seemed like all of our basics were on the brink of disaster, Systemic Risk must be avoided even if it means
Overwhelm buyers of stocks and send everything down. Thats pretty much what happened today when the dow plunged 153 points, s p sank. 73 and the nasdaq dropped. 83 . As the market got hammered because oil, the most important input for stocks these days shed two bucks. Falling to its lowest close since december of 2012, freaking people out. You have to ask isnt that counterintuitive . Doesnt cheaper oil amount to a tax cut for people who drive a car . Isnt it good for business . The answer is yes, of course. However that natural linkage presume it is stock market is a rational beast. In short term, sorry. Its anything but rational. In this new world Hedge Fund Managers who whip around billions made a jaumt that when oil falls the s p 500 should fall, too. Oil going down signals newfound weakness in the uh economy, both domestic and international. A decline in crude threatens to enter the Energy Renaissance responsible for jobs in 16 states so Falling Oil Prices create the economic weakn
It. On the other side of Treasure Island, though, there is a big problem. Sal is going to have that in just a moment. Thank you for joining us. Wednesday morning, september 18. Im pam cook. What day of the week is it . Hump day. Now i remember. Good morning. Im dave clark. Well check weather, traffic, all of that. Steve, you know what day of the week it is . All right. Yes, we all do, thank you. We have clear skies. A little bit of a northerly breeze for some. Just down right chilly for others. There is definitely a little bite to the morning air. 58 san fran. A high today of 72. Looks nice on the coast. 60s and 70s. I try not to show this too often because i dont always buy into it but its generally right. Low 80s for sm. Mid and upper 80s for a few. Again i think santa rosa, nap take definitely in the warmer category. It will be close toward east bay locations. 49 napa. 60 santa rosa. No breeze at the airport. A breeze there. 50s or 60s. Any kind of a breeze, oakland downtown 61. I t