S&P 500 Drops 90 points


Trade Hopes dashed – It turned out a deal with China wasn’t quite yet a done deal. Politicians should be reminded that markets move much faster than trade negotiations or Congress.

Yield Curve approaching inversion – Five-year drops below two-year, but maybe we should wait for the ten year to drop too.

Rising Interest rates – based on Fed fund futures, the chance that the Fed raises interest rates on December 19th is 80%

Brexit – British Prime Minister May lost a round in Parliament while the European Union might let Britain withdraw its Article 50 request to leave – if the British were to change their minds.

The US Economy – GDP growth is good, unemployment is low but home sales are slowing and business capital spending looks soft.  Will the stock market spoil consumers’ optimism?

VIX above 20 – just about normal. Since the end of 2000, the average is 19.5

While anything, and everything, on this list could explain why the market dropped over 3% today, the main reason was probably that it started to sink and everyone followed along.

The posts on this blog are opinions, not advice. Please read our disclaimers.

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