Here's what happens after stocks get walloped on day 1
- Jan. 4, 2016, 11:48 AM
Stocks are getting destroyed to start 2016.
In late-morning trade on Monday the Dow was down well over 400 points while the S&P 500 and Nasdaq were also off more than 2%. This comes after what was an ugly day in Europe and a chaotic start to the year in China, where the CSI 300 Index was halted after falling 7%.
Monday marks the worst start to the year for the S&P 500 since 2001 and the worst start for the Dow since 1932. (However, the Dow fell 8.1% (!!!) to start 1932, which is a mind-numbing plunge for most modern investors.)
And so in a note to clients on Monday analysts at Bespoke looked at what happens to stocks for the rest of the month and the rest of the year after a greater than 1% decline on the first trading day of January.
As many of you might expect, stocks usually go up.
However!
Some of the most memorably terrible years in market history — 1930, 1937, 2001, 2008 — began with greater than 1% drops ... as did four years between 1980 and 1991, which came smack in the middle of a generational bull market.
So, you'll be able to spin this one — if current losses hold — however you'd like. More or less.
As for how stocks fair for the rest of the month, again, stocks usually go up.
Except when they don't.
Posted by: sarah_oz@yahoo.com
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