By Matt McCallMar 09, 2020
It’s been more than 11 years since we’ve seen a down day like today in the market. Investors sold pretty much everything, as more than 95% of stocks in the market were down today.
This, of course, comes on the heels of other panic sell-offs over the last two weeks.
In that context, it’s no surprise that fear levels are in rare territory. In fact, the volatility index (VIX) has only been as high as it is now twice before – during the financial crisis in 2008 and back in October 1987 when the Dow lost 22.7% in one day.
Both times turned out to be great buying opportunities.
I expect that will be the case again. The U.S. economy was in good shape before the coronavirus hit and should be able to weather any brief slowdown. In addition, lower oil prices that are causing such panic today are actually positive for consumers. Add in low interest rates (that will undoubtedly go lower next week), and you have the strong likelihood that consumers will spend, especially with unemployment so low right now. Most people who want a job have one.
Still, I know the headlines and uncertainty are unsettling, and I want to help you sort through what’s noise and what’s real. I recorded a special MoneyLine podcast to share my latest analysis of everything going on – from oil tanking below $30 a barrel to the coronavirus to yields plummeting. I break it all down to show you what it means for you.
Here are a few of the headlines we’ll look at:
Oil prices dropped below $30 a barrel overnight on what looks like a price war developing between Russia and Saudi Arabia. That means lower gas prices, lower manufacturing costs, and a boost to most parts of the economy.
Coronavirus headlines continue to sound scary. We’ll talk in the special podcast about the silver lining – the outbreak is slowing in China, which is great news for them and gives us hope that we’ll soon see something similar here and in all parts of the world.
Yields are falling as investors flee to the safety of bonds, but that also means lower interest rates that increase liquidity and borrowing. I talked to a mortgage lender this weekend who said they are as busy as ever with people looking to buy homes and refinance.
I really encourage you to take a few moments to watch and/or listen to today’s special update podcast. I think it’s a must-watch video to help you through the mass hysteria. I’ll even share some stocks I believe are setting up for big rallies.
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