What recent (last ~8 months) events have changed the total US stock market?

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TheBogleWay
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What recent (last ~8 months) events have changed the total US stock market?

Post by TheBogleWay » Thu Jul 12, 2018 3:01 am

Just for my knowledge and for fun, can some of you here explain some world/US events that have really impacted the total US stock market over the last 8 months?

Relatively vague is fine. There have been some drastic swings, while I know a lot of them can't be explained, I know some can (after the fact) and would like hearing those.

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JoMoney
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by JoMoney » Thu Jul 12, 2018 3:12 am

The Tax Cuts and Jobs Act of 2017 , which potentially increases after-tax margins on US sales, and somewhat incentivizes the repatriation of funds held internationally and may be fueling record levels of stock buybacks
https://money.cnn.com/2018/07/10/invest ... index.html
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TheBogleWay
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by TheBogleWay » Thu Jul 12, 2018 3:44 am

JoMoney wrote:
Thu Jul 12, 2018 3:12 am
The Tax Cuts and Jobs Act of 2017 , which potentially increases after-tax margins on US sales, and somewhat incentivizes the repatriation of funds held internationally and may be fueling record levels of stock buybacks
https://money.cnn.com/2018/07/10/invest ... index.html
Now that's a big one and I was aware of that, however in my head I remembered that being a major boost to the economy about a year ago and one of the reasons stocks skyrocketed for a while just before 2018. I guess I'm less aware of bigger market changing events starting January on.

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JoMoney
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by JoMoney » Thu Jul 12, 2018 4:55 am

The tax changes didn't take effect until the 2018 fiscal year, which is likely why the record buybacks just this past quarter.

I suppose you could also look at the trade situation as adding an air of additional 'uncertainty' to business both in the US and internationally, but it's pretty difficult to say much more about that, especially with regard to how that would broadly and specifically impact things other than just another factor of 'uncertainty'. If you look at individual sectors of the economy, or specific companies, maybe you could come up with some events that have changed things for them specifically. Regulatory changes, and global supply/demand has had impacts on energy, and energy costs have broad impacts. Interest rates have impacts on the financial sector, and more broadly on the cost of capital for other businesses. Employment is up, and that creates a bit of a labor shortage giving workers an edge to negotiate for better salaries, which hurts the margins for companies that are labor intensive.
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by ReformedSpender » Thu Jul 12, 2018 7:19 am

Tariff's for a $1000 Alex

:beer
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by jebmke » Thu Jul 12, 2018 7:36 am

TheBogleWay wrote:
Thu Jul 12, 2018 3:01 am
There have been some drastic swings
Is this true? It sure doesn't feel like the movement has been extraordinary. I have not looked at specific data compared to historical norms.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by goblue100 » Thu Jul 12, 2018 8:01 am

Fear. Either FOMO(Fear of missing out) or the fear of too much of a good thing, depending on whether it is going up or down.
Some people are immune to good advice. - Saul Goodman

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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by Traveller » Thu Jul 12, 2018 8:57 am

jebmke wrote:
Thu Jul 12, 2018 7:36 am
TheBogleWay wrote:
Thu Jul 12, 2018 3:01 am
There have been some drastic swings
Is this true? It sure doesn't feel like the movement has been extraordinary. I have not looked at specific data compared to historical norms.
+1. I don't watch too closely, but I haven't noticed "drastic" swings in the past 8 months.

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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by nisiprius » Thu Jul 12, 2018 9:20 am

jebmke wrote:
Thu Jul 12, 2018 7:36 am
TheBogleWay wrote:
Thu Jul 12, 2018 3:01 am
There have been some drastic swings
Is this true? It sure doesn't feel like the movement has been extraordinary. I have not looked at specific data compared to historical norms.
I don't see anything "drastic." I've drawn circles by hand around "big swings:" yellow for those that look about the same as recent swings, red for those that look bigger.

Image

So, ten swings as big or bigger than this year, in the last twenty years. We've seen something like this every couple of years.

Parenthetically--in my memory, I think of 1995 to 2000 as being one magnificent, steadily growing, uninterrupted bull market. Yet it took quite a tumble in fall of 1998.. That must have seemed very alarming at the time... and yet and I don't remember it at all. I can't put any name on it, or remember what any alleged causes or explanations were.
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by Valuethinker » Thu Jul 12, 2018 9:39 am

nisiprius wrote:
Thu Jul 12, 2018 9:20 am
jebmke wrote:
Thu Jul 12, 2018 7:36 am
TheBogleWay wrote:
Thu Jul 12, 2018 3:01 am
There have been some drastic swings
Is this true? It sure doesn't feel like the movement has been extraordinary. I have not looked at specific data compared to historical norms.
I don't see anything "drastic." I've drawn circles by hand around "big swings:" yellow for those that look about the same as recent swings, red for those that look bigger.

Image

So, ten swings as big or bigger than this year, in the last twenty years. We've seen something like this every couple of years.

Parenthetically--in my memory, I think of 1995 to 2000 as being one magnificent, steadily growing, uninterrupted bull market. Yet it took quite a tumble in fall of 1998.. That must have seemed very alarming at the time... and yet and I don't remember it at all. I can't put any name on it, or remember what any alleged causes or explanations were.
The Asia crash began w Thailand in 1997.

In Q4 1998 Russia defaulted. Then Long Term Capital Management became de facto insolvent. The market took a tumble. Greenspan cut interest rates which set the scene for the dot com bubble: very cheap money to fuel it.

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willthrill81
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by willthrill81 » Thu Jul 12, 2018 9:44 am

nisiprius wrote:
Thu Jul 12, 2018 9:20 am
jebmke wrote:
Thu Jul 12, 2018 7:36 am
TheBogleWay wrote:
Thu Jul 12, 2018 3:01 am
There have been some drastic swings
Is this true? It sure doesn't feel like the movement has been extraordinary. I have not looked at specific data compared to historical norms.
I don't see anything "drastic." I've drawn circles by hand around "big swings:" yellow for those that look about the same as recent swings, red for those that look bigger.

Image

So, ten swings as big or bigger than this year, in the last twenty years. We've seen something like this every couple of years.

Parenthetically--in my memory, I think of 1995 to 2000 as being one magnificent, steadily growing, uninterrupted bull market. Yet it took quite a tumble in fall of 1998.. That must have seemed very alarming at the time... and yet and I don't remember it at all. I can't put any name on it, or remember what any alleged causes or explanations were.
It only seems drastic to some due primarily to recency bias. If I recall, 2017 was the first calendar year where U.S. stocks finished higher every calendar month than the month prior.

Someone on the Meb Faber podcast recently said this and I really like it: "2% [market movement] is Tuesday."
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

jebmke
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by jebmke » Thu Jul 12, 2018 9:50 am

Thanks for the data. That was what I expected to see. It just seemed like normal ups and downs. In fact, when I looked at my total portfolio (bonds + equity) I was quite surprised at how flattish the entire thing was.

When I think of volatility I think of the tech crunch -- or even more exciting was October 1987.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by deltaneutral83 » Thu Jul 12, 2018 10:08 am

TheBogleWay wrote:
Thu Jul 12, 2018 3:01 am
Just for my knowledge and for fun, can some of you here explain some world/US events that have really impacted the total US stock market over the last 8 months?

Relatively vague is fine. There have been some drastic swings, while I know a lot of them can't be explained, I know some can (after the fact) and would like hearing those.
Check out the swings in the Fall of 2008 (Lehman Failure) through Christmas. DOW was moving 3% (usually downward) on a calm day. Many days of 6%. And this was less than ten years ago.

TheBogleWay
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by TheBogleWay » Thu Jul 12, 2018 6:36 pm

I stand corrected on my wording, it's not drastic, but I'm still curious if anyone is able to label the minor changes since January just for fun.

Thanks!

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willthrill81
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Re: What recent (last ~8 months) events have changed the total US stock market?

Post by willthrill81 » Thu Jul 12, 2018 6:44 pm

TheBogleWay wrote:
Thu Jul 12, 2018 6:36 pm
I stand corrected on my wording, it's not drastic, but I'm still curious if anyone is able to label the minor changes since January just for fun.

Thanks!
The 'financial news' pundits all try. I find it interesting how they say "the market is up/down due to X" as if they actually know that. It's kind of cute in a sordidly sad and annoying sort of way.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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