Monday, stocks fell 4% in Asia, 8% in Europe, and 9% in the U.S. on mammoth volume. The VXO shot up 35% to close 61.98 in the extreme fear zone. The 10-Year U.S. Treasury bond yield collapsed 29% to close at 0.50. The Dow Jones Industrial Average plummeted over 2000 points to close below 24,000. The NASDAQ closed below 8000 and the NYSE closed well under 12,000. Apple ended below 270 and IBM below 120. On top of the angst from the coronavirus, Saudi-Arabia unleashed an oil price war.
Tuesday, stocks rose 1% in Asia, fell 1% in Europe, and recovered 4% in the U.S. on mammoth volume. The VXO fell 14% to close at 53.57. The 10-Year U.S. Treasury bond yield skyrocketed 50% to close at 0.75. Precious metals fell 3%. The Dow Jones Industrial Average ended the day above 25,000 and the NASDAQ recaptured 8000. Apple closed above 280 and IBM settled above 120.
Wednesday, stocks fell 2% in Asia, 0.7% in Europe, and 5.2% in the U.S. on mammoth volume, The VXO rose 9% to close at 62.24. The 10-Year U.S. Treasury bond yield shot up 10% to close at 0.82. Precious metals miners fell 8%. The Dow Jones Industrial Average plummeted nearly 1500 points to close below 24,000. The NASDAQ closed below 8000 and the NYSE closed well under 12,000. Apple ended below 280 and IBM below 120.
Thursday, stocks cratered in Asia 4.6%, in Europe 11.5%, and 10.0% in the U.S. gigantic volume. The S&P 500 closed down more than 20% from its high — officially ushering in a bear market. The VXO shot up 36% to close at 84.63. The 10-Year U.S. Treasury bond yield rose 4% to close at 0.85. Precious metals plummeted 6% and their miners gave up twice that amount. Crypto currencies lost about 40% in one day.
The Dow Jones Industrial Average plummeted over 2300 points to close well below 22,000. The NYSE closed well under 11,000, Apple ended below 250, and IBM sunk well below 110. All this carnage occurred despite the Fed’s failing efforts to stem the tide.
Friday, stocks fell 1.6% in Asia, rose 1.5% in Europe, and shot up 7.9% in the U.S. mammoth volume. The VXO fell 31% to close at 62.25. The 10-Year U.S. Treasury bond yield jumped up 10% to close at 0.95. Precious metals fell 5% and their miners dropped more than twice that amount.
Cash is king right now. Available cash in a bear market enables purchase of securities for reasonable or even depressed prices. My take is the coronavirus was the black swan needed to finally begin the long process of repricing an obscenely overpriced market. The virus gives the Fed and President Trump the cover they need to deflect blame for the crash on the virus rather than them. Some stocks like those in the energy sector may be attractive even now, but in general, we likely have much farther to fall before we have our golden opportunity to pick up bargains.
Precious metals are still selling above the cost of production. The reduced cost of oil and lower interest rates lowers production cost even further. While it’s good to have some precious metals and their producers in an investment portfolio, the case for loading up now is not compelling to me. Do you remember what happened to them in 2008? They crashed as investors sold gold and everything else to meet margin calls and accumulate cash.