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Every Day Is Like Two Months for Stocks With Unrelenting Swings

Sarah Ponczek

(Bloomberg) -- With U.S. stock markets taking a reprieve from the fastest rout on record, here’s one stat to grasp just how bad it has been: Almost two months of gains for U.S. stocks were being wiped every single day.

Since peaking on Feb. 19, the S&P 500 Index had fallen 34% in the 23 trading days through Monday, reaching its lowest level since December 2016. Do the math on that, and it turns out each day has wiped out an average of 1.7 months of gains.

Of course, volatility goes both ways, and brutal sell-offs have been met with extreme rallies. The S&P 500 has moved more than 6% a day on average over the past 11 sessions. The trend continued Tuesday, with the benchmark jumping about that much at mid-morning.

A quick ride on the way down could mean a quick trip on the way back up, according to Dennis Debusschere, the head of portfolio strategy at Evercore ISI. He says the market could retrace 50% of the sell-off “very quickly” if fiscal stimulus takes hold, the Federal Reserve’s extraordinary interventions calm nerves and the coronavirus pandemic begins to abate. Still, that would leave a ways to go.

“Tough to argue we will get all of it in short order,” he said. “Or to put it differently -- we could go up 30% and still be roughly 14% off the highs.”

The situation and statistics are evolving quickly, as investors attempt to handicap a spreading pandemic and both monetary and fiscal stimulus. At the start of the week, the S&P 500 had fallen 6.4 times more than the average bear market over the period of time that had passed, data from The Leuthold Group show.

“We’ve been getting six months of returns or losses almost every single day, just in terms of these market swings,” Samantha Azzarello, global market strategist at JPMorgan Asset Management, told Bloomberg Television. “We could see a lot more downside from here, and I think we all know that.”

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