The market has been shaky for a while now, but today it just got real.
The NASDAQ crashed 3%. The S&P fell about 2%. The Dow dropped over 260 points.
So here’s the weird thing. There’s really no “story” associated with this selloff, which is a point noted by Jesse Livermore on Twitter.
Now let’s be clear, usually stories that explain market movements are BS, but there usually is one: Ukraine, China, oil, political gridlock whatever.
But this time it just seems to be: stocks are falling.
The closest we have to a story is what David Zervos talked about yesterday, that the market is worried the Fed will tighten too soon. And Zervos has some points in his favour. But it’s not a perfect story.
In his email tonight to clients, BTIG’s Dan Greenhaus (@danBTIG) writes:
We’ve heard an endless parade of “of course equities are falling, the Fed is tapering!” Two important points get missed on this front. First, the S&P 500 is still 3.0% above the level from before taper announcement. Second, the whole premise of the negative-taper argument was that rates would spike which would dent stocks from a number of angles. The 10 year yield is 20 bps lower than before the taper while the two year yield is roughly unchanged. One can’t have it both ways.
The head-scratching will continue.
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