The good news about this bear market in stocks is that we’re more than halfway through it. The bad news is that we’re getting close to the final stage, when “everything must fall.”
That’s according to the blogger behind Irrelevant Investor and the director of research at Ritholz Wealth Management, Michael Batnick.
He first explains the order of “indiscriminate selling” in a such a down market — speculative names, the leaders, the rest. That has been the playbook in the past, as shown by his chart from hedge fund Coatue (via Eric Newcomer) that breaks down the dot.com bubble bursting:
Irrelevant Investor/Eric Newcomer
A selloff in mid-2021 marked phase one, said Batnick. Meme stocks and some special-purpose acquisition vehicles got hit, along with Cathie Wood’s ARK Innovation ETF ARKK, +2.34%, which lost 24% in 2021 and is down 54% this year.
Earlier this year phase two swept in when the “tech generals fell one by one. Microsoft MSFT, +1.04% hasn’t been this far below its 200-day moving average since 2021. The uptrend that it’s enjoyed over the last decade is decidedly over,” wrote Batnick.
That brings us to the “everything” or phase three, and Batnick points out that only nine stocks representing $1 trillion in market cap were within 5% of their 52-week highs as of early Thursday, while 145 names representing $9 trillion are within 5% of 52-week lows.
He describes his list of more than 50 stocks in the latter camp as a “who’s who of American business.” They include Berkshire Hathaway BRK.A, +1.39%, BlackRock BLK, +1.99%, JPMorgan JPM, +4.58% and Morgan Stanley MS, +4.50% — a pair that got second-quarter earnings season off to a lousy start — then Facebook META, +4.21%, Microsoft MSFT, +1.04%, eBay EBAY, +3.76% in the tech space, other “generals” such as Caterpillar CAT, +2.02%, Deere DE, +1.14% and General Motors GM, +4.05%.
Also on that list are Nike NKE, +1.43%, Disney DIS, +3.66%, 3M MMM, +1.42%, Honeywell HON, +1.94% and Delta Air Lines DAL, +1.07%. There are “no winners,” in this last lap of the bear market, as Batnick reminds us. “A new bull market will begin eventually, but right now, we’re in the ‘everything must fall’ phase.
A ‘who’s who of American business’ — big Wall Street names are marking the end phase of the bear market, says adviser
The good news about this bear market in stocks is that we’re more than halfway through it. The bad news is that we’re getting close to the final stage, when “everything must fall.”
That’s according to the blogger behind Irrelevant Investor and the director of research at Ritholz Wealth Management, Michael Batnick.
He first explains the order of “indiscriminate selling” in a such a down market — speculative names, the leaders, the rest. That has been the playbook in the past, as shown by his chart from hedge fund Coatue (via Eric Newcomer) that breaks down the dot.com bubble bursting:
Irrelevant Investor/Eric Newcomer
A selloff in mid-2021 marked phase one, said Batnick. Meme stocks and some special-purpose acquisition vehicles got hit, along with Cathie Wood’s ARK Innovation ETF
+2.34% ,
ARKK,
which lost 24% in 2021 and is down 54% this year.
Earlier this year phase two swept in when the “tech generals fell one by one. Microsoft
+1.04%
MSFT,
hasn’t been this far below its 200-day moving average since 2021. The uptrend that it’s enjoyed over the last decade is decidedly over,” wrote Batnick.
Read: Here’s why Britain’s Warren Buffett is sticking with Facebook’s parent and other beaten down techs
That brings us to the “everything” or phase three, and Batnick points out that only nine stocks representing $1 trillion in market cap were within 5% of their 52-week highs as of early Thursday, while 145 names representing $9 trillion are within 5% of 52-week lows.
He describes his list of more than 50 stocks in the latter camp as a “who’s who of American business.” They include Berkshire Hathaway
+1.39% ,
+1.99% ,
+4.58%
+4.50%
+4.21% ,
+1.04% ,
+3.76%
+2.02% ,
+1.14%
+4.05% .
BRK.A,
BlackRock
BLK,
JPMorgan
JPM,
and Morgan Stanley
MS,
— a pair that got second-quarter earnings season off to a lousy start — then Facebook
META,
Microsoft
MSFT,
eBay
EBAY,
in the tech space, other “generals” such as Caterpillar
CAT,
Deere
DE,
and General Motors
GM,
Also on that list are Nike
+1.43% ,
+3.66% ,
+1.42% ,
+1.94%
+1.07% .
NKE,
Disney
DIS,
3M
MMM,
Honeywell
HON,
and Delta Air Lines
DAL,
There are “no winners,” in this last lap of the bear market, as Batnick reminds us. “A new bull market will begin eventually, but right now, we’re in the ‘everything must fall’ phase.
Read the full blog post here.
And: War inflation is slowing. Here’s the S&P 500 level where a Bank of America strategist says investors should ‘gorge’ on stocks
Source: https://www.marketwatch.com/story/a-whos-who-of-american-business-big-wall-street-names-are-marking-the-end-phase-of-the-bear-market-says-adviser-11657891955?siteid=yhoof2&yptr=yahoo