Even worse, the S&P closed down below its 200-day moving average for the first time since June 2016. Breaking through the level is often a sign of a further decline. Volatility went higher.
Justin Walters, co-founder of Bespoke claimed in an email: “Based on recent market action, the bears clearly have control right now. The path of least resistance is lower until something comes along to reverse that trend.”
The S & P fell back as technology led the fall. Amazon and Netflix both dropped more than five percent. Intel fared even worse as Apple announced it would make its own chips replacing those of Microsoft. It fell about 8.5 percent. Apple will replace the chips as early as 2020. Amazon is being hammered partly because of Trump’s constant criticism of the firm.
Other stocks in the deep red include Nvidia — that Wells Fargo claims has risks that are rising significantly. For some reason Tesla CEO Elon Musk in an April Fool joke reported that his company was bankrupt. It isn’t yet, but the stock has declined considerably.
Elon was found passed out against a Tesla Model 3, surrounded by “Teslaquilla” bottles, the tracks of dried tears still visible on his cheeks.
This is not a forward-looking statement, because, obviously, what's the point?
Happy New Month! pic.twitter.com/YcouvFz6Y1
— Elon Musk (@elonmusk) April 1, 2018
A few stocks were able to buck the down trend including Barrick Gold as the mining company benefited from the rising price of gold as investors seek a safe haven in this troubled market. Humana the health insurer’s shares also rose after reports that Walmart is considering a takeover of the company in a deal that would be close to $40 billion.
At the close
The Dow Jones Industrial average fell almost two percent, 1.9, or 458 points. As China slapped retaliatory tariffs on numerous US agricultural goods, investors may fear a global trade war. As mentioned, the S & P closed down more than 2.2 percent. This is the worst showing since 89 years ago when it declined 2.5 percent, a prelude to the big crash later in the year heralding the Great Depression.
Tomorrow should be an interesting day and may show whether the trend is continuing down or whether today was just a correction in a continuing bull market.
