Excerpt from Louis Navellier's Marketmail - 02/25/2020
source: Bloomberg
Last week, I warned you that the market might correct after earnings season wound down. Sure enough, the market finally had a down week (-1.25% in the S&P 500), then a huge Monday selloff of 1,031 Dow points. After setting a new high at 3,392 last Wednesday, the S&P 500 closed at 3,225 on Monday, down 4.91%, including -3.55% on Monday – the 48th biggest one-day drop since SPY began trading in 1993.
The good news is that the market usually bounces back strongly from huge Monday declines. According to Bespoke Investment Group, there have been 18 prior 2%+ drops on Mondays in this bull market (since March 2009), and SPY has risen an average 1.02% the next day (“Turnaround Tuesday”) then +3.16% the next week and +6.08% after a month, with positive returns 17 of 18 times for the next week and month so don’t panic! (For more information, check out my podcast, recorded during Monday’s huge selloff.)
I’ll have more to say about the slowdown in global growth – partly due to the coronavirus panic – in my regular column (to the right). In our other columns, Bryan Perry is very concerned that Beijing may be covering up the worst news about the coronavirus. Gary Alexander then shows how the U.S. economy remains an oasis to the world, although rising federal deficit spending could become a drag over time. Next, Ivan Martchev examines the breakdown of the historical reverse correlation of gold and the U.S. dollar, while Jason Bodner uses the moon’s cycle to show how market cycles follow a similar pattern.
A Look Ahead
By Louis Navellier
Growth Continues to Contract in the Three Biggest Economies Outside the U.S.
Income Mail
By Bryan Perry
Beijing's Bad Behavior Sends a Sobering Message to The World
Growth Mail
By Gary Alexander
The U.S. Economy is "In a Good Place" (Says Jerome Powell)
Global Mail
By Ivan Martchev
The Positive Correlation Between Gold and The Dollar Becomes Weirder and Weirder
Sector Spotlight
By Jason Bodner
Market Cycles Resemble (but don't follow) The Moon's Cycles