These Three Major Stock Bear Markets are Still Roaring
These Three Major Stock Bear Markets are Still Roaring by David Haggith for The Great Recession
The 2018-2019 stock bear market is still roaring among several major indices. It has broken all the market’s FAANGs and still shows no signs of backing off.
The New York Stock Exchange Composite bear market
One of the broadest indices for the US stock market, the NYSE, entered a bear market in January of 2018 (falling to the point where it could be classified as a bear market (down 20% or more) in December of 2018). It has not recovered from its approximately 22% fall after two tries that now represent a downward trend line for the index’s subsequent major peaks. (By “entered” I’m talking, not about the date on which an index was first down 20% from its previous highest point, but the date on which it began the trip down that eventually wound up passing the 20% mark.)
Russel 2000 stock bear market
Another one of the broadest major indices of the US Stock market, the Russel 2000, entered a bear market on August 31, 2018, falling about 28% by December, and has never even come close to recovering from its fall, even at most recent peak.
Thus, by some of its broadest measures, the US stock market remains a bear market.
Dow Jones Industrial Average (DJIA) bear market
The oldest and most august of US stock market indices, the Dow Jones Industrial Average (DJIA), began its decent into a bear market a month after the broader Russel 2000 on October 3rd and also has not recovered to its former summit. It was setting a multi-month string of new highs and had just set two new daily highs in a row when it toppled.
The Dow Jones Transportation Average entered a bear market two weeks before the DJIA on September 14, 2018, from which it also has never recovered. (Transportation stocks are seen as leading indicators, which they proved to be in this case. What does it say that these trend leaders are leading the latest plunge at a steeper rate than their sister, the DJIA?)
The bear’s FAANGs all broke off
Here is an interesting graph that shows the individual bear markets that each of the FAANG stocks entered in 2018. The breaking of the FAANGs started with with Netflix and Google (Alphabet) in the first half of summer: