Every Sunday night, I watch the Asian stock markets to get a sense of how U.S. stocks will open Monday morning. Well, I didn’t get much sleep last night as Japan’s Nikkei Index suffered its largest one-day drop since 1987.
A surging Japanese yen and fears of a U.S. recession are two big reasons that selling has spread around the world.
So on today’s video update, I discuss the sell-off and try to bring it into historical perspective. Big down days always make it feel like the world is ending on Wall Street. But in reality, the world will only end once… and today isn’t that day.
The selling caused the CBOE Volatility Index (VIX) to jump to a level it has only been reached twice in the past two decades – during the 2008 great financial crisis and the COVID-19 lockdowns.
Clearly, fear is running rampant. But it may not be warranted. The S&P 500 averages about one correction (a drawdown of 10% of more from its high) per year. As of this morning, the low of the day had the S&P down 9.8%. So in essence, this is normal behavior. But it doesn’t feel normal to most investors, and panic has set in as a result.
My job is to help ease that panic.
Watch this morning’s video update and get my full perspective on what’s going on.
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