Far from Unprecedented: Nine Selloffs Like this, and Nine Rebounds.
The Bloomberg article has much prettier graphs than I can do, but I can provide the view from a wonderful ski field in New Zealand, in the spirit of the Winter Olympics, Treble Cone near Wanaka.
So, since the beginning of the bull equity market run in 2009 there have been nine significant declines in global equities. On each occasion global equity markets have come back.
The nine episodes are outlined in the Table below. They make for interesting reading and are distant memories.
Now of course we maybe only partway through the decline of the current “correction” and it could be different this time i.e. no bounce
Market movements are in relation to the US S&P 500 Index.
|Date||Level of Decline||Trigger|
|January 2016||-11% of three weeks||Concerns over economic slowdown and mounting Chinese debt|
|August 2015||-11% over six sessions||China’s shock devaluation of the Yuan|
|October 2014||-5.0% over week||Spread of Ebola virus, concern over end of US Quantitative Easing and tensions in the Middle East|
|January 2014||-3.6% over the month||Emerging markets equities and currencies sold down|
|October – November 2012||-7.2%||US Election uncertainty between Obama and Romney|
|March – June 2012||~-10.0%||US Federal Reserve indicating it will likely hold back on further monetary Policy easing e.g. Quantitative Easing|
|July – August 2011||-17%||US Credit downgrade and weaker than expected jobs report, Greece|
|January 2010||-8%||Market correction uncertainty as to global growth outlook, particularly Europe|
|April – July 2010||-16%||Similar reasons and the infamous flash crash|
|January 2018||-10.1%||Rising longer dated interest rates, inflation concerns, Fed tightening, negative feedback loop of short volatility Products|
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