One out of every three stocks in the S&P 500 stock index is in a bear market over the past three months. Five Dow Jones Industrial Average stocks have fallen into bear market territory since October. A third of the NASDAQ 100 stock components are there.
A bear market commonly is defined as a drop of 20 percent or more over at least two months.
Yep, we're there for many commonly held stocks like Apple, Amazon and AIG. Those are just the "A"s.
It has been a horrible holiday season for shareholders. All of the major stock sectors except for the utility sector are lower compared to where they were three months ago. Meantime, the American economy is growing by almost 3 percent, according to the Federal Reserve Bank of Atlanta's GDPNow gauge.
Sure, it's possible to have a bear market for stocks without an economic recession. Look no further than your quarterly 401(k) statements coming soon. Instead of recession risk, though, stockowners are gripped by concerns over slowing economic growth.
The traditional wish of investors for a Santa Claus rally between Christmas and New Year's has been scratched off the list. In the week ahead, it has been replaced with hope the selling slows and stops.
Santa's kindly grin and rosy cheeks have been wiped away. Instead, if he's a stock investor, he's pale, grim and worried. The naughty list includes the trade war with China, waning impact from the tax reform a year ago, Brexit, interest rate hikes by the Federal Reserve, high levels of debt by corporations, consumers and the federal government, slowing profit growth, and a slowing economy.
That's a lot of coal for one stocking.
