S&P 500 Index Sectorsīut it’s worse when compared to their respective highs: And several of the Big Tech stocks have plunged far more than that from their respective highs more in a moment. In further spooky parallels to the dotcom bust, year-to-date: The two tech-related sectors – Communication Services and Information Technology – have plunged 31% and 39%. Year-to-date, Energy was the only sector that was up (+34.9%), though the sector dropped 9.3% in September, according to S&P Dow Jones Indices. The sectors that got whacked the most in September were: Information technology (-12.0%), Communication Services (-12.1%), and Real Estate (-13.1%).
In September, the S&P 500 Index dropped 9.3%, the worst monthly drop since March 2020, and the worst September since the dotcom bust.Įvery sector got whacked in September, even energy. That’s how crazy this market still is, and that’s why the bottom is not anywhere in sight, and there is absolutely no capitulation, but stocks are due for a bounce. Carvana is down 95% from its intraday high on August 10, 2021. Up 170% in five weeks, and giving up all of it over the subsequent six weeks. Many of the stocks on my list of Imploded Stocks have plunged by 50% or more over the same period, to carve out new lows after having shot up by 100% over the prior weeks – such as Carvana which roundtripped from $20 on July 14, to $54.59 on August 16, and back to $20.30 on Friday, September 30. So since the end of this summer’s bear-market rally on August 16, the S&P 500 Index has dropped 16.7% and the Nasdaq has dropped 19.5%, both of them just barely above the February 2020 levels. Now inflation is raging well above the Fed’s target.
But back then, inflation was well below the Fed’s target. The unsightly demise of this bear-market rally is adding to the spooky parallels to the dotcom bust, which was also interrupted by a rally in the summer of 2000, when the Nasdaq Composite rallied 33% without getting back to its previous high, and then ultimately collapsed by 78%, from which it wouldn’t fully recover until 15 years later, in July 2015, after the Fed had thrown trillions of dollars at the market with QE. But the market is due for a bounce after what it has been through in September, or actually since August 16, which was the end of the bear-market rally. It could also start on Tuesday or in November or whenever. Monday would be a good start for a bounce. But the market is due for a bounce, according to the WOLF STREET dictum that “Nothing Goes to Heck in a Straight Line.” By Wolf Richter for WOLF STREET.
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