Monday, stocks rose in Asia 0.3%. In Europe, they fell slightly and in the U.S. they closed nearly unchanged on low volume. Tuesday, stocks rose 0.6% in Asia and 0.3% in Europe, but fell 0.5% in the U.S on low volume. The VXO rose 9% to 11.69 and gold dipped to close pennies below the $1300 per ounce mark. Wednesday, stocks moved up 0.3% in Asia but down 0.5% in Europe. In the U.S., stocks changed little on low volume as the FOMC announced more of the same.
Thursday was the big day. Stocks tumbled in Asia 0.7%, in Europe 1.3% and 1.8% in the U.S. on low moderate volume as Argentina defaulted on it bonds . Fear picked up as the VXO skyrocketed 36% to close at 16.09. The Dow Jones Industrial Average closed down over 300 points to put it in negative territory for the year — joining the Russell 2000 Index that was already there.
Friday, stocks in Asia and Europe continued the trend and each fell another 1.2%. In the U.S., the decline was more moderate — just 0.3% on low volume. Still for the week, stocks lost about 3% and the VXO fear index shot up over 45%. Nearly all of the damage was done on Thursday.
While “investors” have become accustomed to having nothing but weekly gains, in perspective a 3% weekly loss is actually comparable to the decline seen just last April and less than the one around the end of January. It remains to be seen whether or not the stock market will recover and move still higher as it has done countless times during this relentless rally as the punch bowl slowly is withdrawn. Stay tuned.