Stock market selloff sends Dow at the lowest point since December 2016
March 21, 2020
US stock market news
All major US stock market indexes fell more than 3.5%. Dow fell more than 900 points, closing at 19,173.98 points,-913.21(-4.55%).
“The Dow’s close at 19,173 points marked its lowest level since December 2, 2016. In just this past week the Dow lost more than 4,000 points, making this its worst weekly point loss ever. On a percentage basis, March is set to be the worst month since September 1931 as the Dow has dropped more than 24%. Finally, all 11 sectors in the S&P 500 are now more than 20% below their respective 52-week highs, a drop that analysts define as a bear market. – Sheetz, Francolla”
Stocks and their valuation
“Valuation is ‘completely out the window,’ Charles Schwab strategist says
Charles Schwab chief investment strategist Liz Ann Sonders said on “Closing Bell” that the market won’t bottom until the growth of coronavirus cases starts to flatten out and said that traditional valuation metrics do not make sense in this environment. “I think valuation is completely out of the window because we have the numerator and denominator completely imploding. What’s unique about this particular crisis is that instead of just guiding down …. most of them that are most hit by this are simply withdrawing guidance,” Sonders said. Sanders said she is telling clients to consider re-balancing their portfolios more frequently if possible. — Pound“
The coronavirus crisis has made stock trading, stock investing very risky and difficult. Stock valuations are now ignored, as the risk-off sentiment is dominant and sends stock prices lower. Stocks that were not at extreme stock prices before this selloff are now at much lower price levels and stocks that had a stock price well beyond their intrinsic value have now faced a deep correction. Stocks to buy, stocks to sell, stocks to invest in, investing and trading, in general, are very risky with all this increased volatility. And the truth is that when the next earnings reports are released, there will be a very large distortion in their trend and stock price valuations have to be adjusted accordingly and revised to the downside, justifying at a large degree this stock market selloff.