Real Time Insights help an investor see -- by showing what all investors see. An obvious use has fallen upon us (pun intended).
An Avalanche of Sell Orders!
My forward-looking query: To Editors and Subscribers alike...
What fundamental catalyst moves first to END this slump?
(1) AAPL’s share price rises. AAPL stock started to decline in mid-September, after it topped at over $700 a share. It closed yesterday below $540 a share, a -20% plunge. Given its huge market cap in the NASDAQ, its effect on the IT sector, and as a bellwether generally, one catalyst to the stock market -- a recovery in AAPL.
(2) Bond yields crumble in Southern Europe. In early September, a steep decline in the Spanish 10-year rate was a positive catalyst, going from over 7% all the way down to a 5.3% rate. Unfortunately, since mid-October, this cornerstone indicator of European macro and financial stability has risen to 5.8%. Spanish authorities are holding up agreements to get European-wide aid. They worry about strings attached. How about a deal?
(3) Fiscal cliff resolved. Wake up Government! Investors are reacting negatively to the potential for a blown budget deal, followed by recession. Sell stocks now and buy them back later, after January. It looks smarter than hold and ride it out.
(4) China stimulates. Not co-incidentally, I think, the 10-year Communist Part Congress convened this week. This is yet another source of uncertainty. Decisions can be a positive catalyst.
(5) Good old-fashioned positive U.S. economic data. Did anyone notice consumer sentiment hit a five-year high, and weekly claims data was very positive this week?
(6) Get it, John, we do not end the slump! This is a bear market, not a correction.
(7) The slump is already over.
Finally…
How soon does your chosen catalyst materialize? At what level does the S&P 500 sit when the corner is turned?
I hope to chime in merrily along our way.
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