DOW FALLS 114 POINTS, AND HALF OF THE YEAR IS OVER: Here's What You Need To Know

Stocks tumbled into the close to end the first half of the year.

First, the scoreboard:

  • Dow: 14,983.2, -40.9, -0.2%
  • S&P 500: 1,611.1, -1.4, -0.1%
  • NASDAQ: 3,413.8, +12.6, +0.3%

And now, the top stories:

  • In the long-run, the halfway point of a year is just an arbitrary marker. But it helps to reflect on what happened so far this year because it has been busy.
  • Despite tremendous volatility that put it into a bear market, Japan’s Nikkei is up by over 20% this year.  Thanks Prime Minister Shinzo Abe and Bank of Japan governor Kuroda for extremely stimulative and inflationary monetary policy.
  • Another asset class that fell into a bear market without any notable rally was gold.  Analyst blame everything from rising real interest rates, a stronger dollar, and momentum for sending the yellow metal down by almost 30% this year.
  • For American investors, it paid to be invested in the good ol’ S&P 500, which ends the first half a remarkable 13%.  Unfortunately, the same can’t be said about the emerging markets where stocks were in the red across the board.
  • The big question on everyone’s mind: what’s next?
  • Well, some people worry that the surge in interest rates echoes the bond market carnage we witnessed in 1994.  If that year is to repeat, you might want to stay out of bonds.  However, the analysts at Deutsche Bank believe a 1994-scenario should be welcomed by those invested in stocks.
  • But in a webcast yesterday afternoon, bond god Jeffrey Gundlach argued that the bond market sell-off was ending.  “The liquidation cycle appears to have run its course,” he said as he reiterated his expectation for the 10-year Treasury yield to fall to 1.7%.
  • Don’t Miss: Jeff Gundlach Hastily Threw Together This Presentation To Explain Why The Bond Markets Crumbled »

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