The stock market is all set to hit rock bottom. This is predicted to be even worse than the Great Depression.
Dow Jones and S&P 500
The two benchmark US stock indexes the Dow Jones Industrial Average and the Standard and Poor 500 are careening towards a historically bad December performance.
Both the US benchmark stock indexes are on their way towards their worst performance in December since the year 1931. When the stocks were terribly battered because of the Great Depression.
On Monday the Dow Jones Industrial Average closed down at 7.6 percent while the S&P 500 closed at 7.8 percent.
These losses starkly eclipse the most recent slump of the year 2002 that was considered as major slump. It was all because both the S&P 500 and The Dow had fallen by 6 percent each.
Stock Markets in December and Santa Rally
December is usually considered as very positive month for the stock markets, as the stocks rally during the end of the year traditionally and this phenomenon is termed as Santa Rally.
The stock rise in December is due to the fact that investors are filled with optimism and festive cheer that envelops the world at large during this time.
However no such thing is happening this year and analysts are therefore describing it as the Grinch like December run.
The Dow has tumbled down only during the 25th Decembers tracing back to the Great Depression year 1931.
According to the Stock Trader’s Almanac the average gain of S&P 500 was 1.6 percent making December the typically the best month for the markets.
The US equity strategy team announced that at the present moment the stock market is pricing in a material slowdown into the upcoming year. It is because the positioning and sentiments have reached such levels that have not been witnessed since the early 2016.
The priceless metal Gold is running entirely flat. Now a days trading at zero percent difference from its initial opening price.