Most FAANG stocks are in a bear market and economically sensitive sectors have sold off dramatically
A couple of weeks ago I wrote, “If this selloff turns into a 10% decline, it would be the second such correction within eight months, which I fear would mean this nearly decade-old bull market is really in trouble.”
My reasoning: This was such a rare event (over the past 30 years it has happened only once, and never after a long bull run) that I could no longer assume the stock market would come roaring back. Monday’s wild swings in share prices ultimately drove the Dow Jones Industrial Average to an 8.9% decline
from its early October all-time closing high and the S&P 500 to a 9.9% drop from its Sept. 20 peak. The Nasdaq Composite Index and the small-cap Russell 2000 off 13.1% and 15.1%, respectively, from their late August peaks, are comfortably within correction territory.
What bothers me most is that some of the previous biggest gainers are trailing badly, while economically sensitive sectors have sold off dramatically, and bellwether home builders’ stocks are already deep in a bear market.
Read the full article here by Howard Gold