by Jack
Today’s 2000 point drop in the stock market was very predictable given the gyrations last week over the corona virus and the squabble between the Saudi’s and the Russians over crude prices. But, the bargain hunters are asking where does it go from here? My bet is the market is still inflated. I see it retracing another 6-8% or more. We are by no means clear of the continuing damage to the economy caused by this virus. The Saudi/Russian tussle should help consumers with low crude prices as long as production stays high and that should offset some of the corona damage, but it won’t help refiners, drillers and suppliers, they need high crude to stay in the black, pun intended.
Felix Baumgartner stepped into the void nearly 128,000 feet (39,000 meters) above southeastern New Mexico Sunday at just after 12 p.m. MT (2 p.m. ET, 1800 GMT), then landed safely on the desert floor about 20 minutes later. His harrowing plunge shattered the skydiving altitude record, which had stood for more than 50 years, and it notched a few other firsts as well.
During his freefall, for example, Baumgartner became the first skydiver ever to break the sound barrier, which is about 690 mph (1,110 kph) at such lofty heights. And this happened on a special day — today is the 65th anniversary of the first supersonic airplane flight, which was piloted by American Chuck Yeager in 1947 aboard the Bell X-1 rocket plane.
“I know the whole world is watching now, and I wish the world could see what I see,” Baumgartner said just before the leap. “And sometimes you have to go up really high to see how small you really are.” [Photos: Skydiver’s Makes Record 24-Mile Supersonic Jump]
Preliminary results of the jump showed Baumgartner spent about 4 minutes and 20 seconds in freefall (a record without a drogue parachute). His maximum speed was 833 mph (1,342.8 kph), said Brian Utley, an air sports official watching over event.
The jump’s top speed was thus Mach 1.24 — considerably faster than the speed of sound. Applause and cheers erupted in a post-jump press conference as Utley relayed the good news.
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The stock market was once driven by two factors: Greed and fear. It is now driven by three: Greed, fear and computer analysis programs. We all should know about computational programs from NASA climate science. GIGO — Garbage In/Garbage Out.
I too believe the market value has long been inflated and a response to that perception is part of what is going on now to make investors nervous. The fed hasn’t been much help either. Some blame the fed entirely. Add in the coronavirus and the oil war and you have the trigger for a correction on an overbought market that was ripe for something to trigger a correction.
The market may have dropped the largest point amount in history on Monday but not the largest percentage drop. The drop amounted to 4.6%, the largest one day decline since August 2011 during the European debt crisis. What is happening in the market now really does not compare to the panic in 1929 which had repeated daily double digit losses.
In any case, last week’s losses had turned into a net gain by Friday. What happens on Monday does not necessarily determine what happens for the rest of the week. Today (Tuesday March 10) Monday’s losses were cut in half with net gains.