Should I stay or should I run like crazy?
Investors no doubt have plenty of questions after Wall Street’s Wednesday meltdown, which wiped more than 800 points off the Dow DJIA, -0.58% making for the worst day since February for it and the S&P SPX, -0.64% The Nasdaq COMP, +0.03% saw its worst session since Brexit back in June 2016.
The selloff may have legs, judging by the looks of things this morning, while potential catalysts pile up—bond yields, the trade war, global growth worries, earnings jitters, your taxi driver telling you to sell.
But maybe none of that should matter to future retirees, who may want to recall some evergreen advice from investing legend Warren Buffett: “Be fearful when others are greedy and greedy only when others are fearful.”
That leads us to our call of the day, from Reformed Broker’s Josh Brown, who says savvy U.S. investors are not for scaring.
“Americans have accumulated $28.3 trillion in retirement assets, 19% of which is in 401(k) accounts ($5.3 trillion). There are 550,000 plans and 54 million participants. These dollars are coming in every month, the lower the prices for stocks, the better,” said Brown in a wee-hours tweet-rant, as he adds: “F****ing bring it.”
Brown goes on to say that with 160 million Americans in the workforce and 80% of them under 54, “they’re in the accumulation phase of their lives. I know you want them to panic for the clicks, but they won’t. They are automated buyers of dips. It‘s the best thing for them.”
Now you will see imbeciles cite demographics as a secular negative. They’ll focus on the withdrawal of capital from retirement accounts for the 7.6 million US workers aged 65 to 74.
Well, where the hell do you think that money ends up being spent when it’s withdrawn, genius?
— Downtown Josh Brown (@ReformedBroker) October 11, 2018
Understandably, not everyone may be feeling so Buffett-brave after Wednesday’s drama. Blogging for CrackedMarket, Jani Ziedins says those losing sleep over this fresh volatility may want to trim position sizes to something that is more manageable.
Read: How much of your 401(k) retirement plan is affected by market volatility?
“The key to surviving the market is keeping your head when everyone else is losing theirs. Do whatever is necessary to reclaim your perspective. If that means dialing back your position sizes, then that is what you need to do,” says Ziedins.
So if you think a 0.25% bump in Treasury rates will clobber the economy, then sell and lock-in profits, but if you don’t think the economy is “teetering on the verge of a recession,” ignore the noise and wait for prices go up, he says.
As for Ziedins himself: “If I wasn’t already fully invested in this market, I would be buying this dip with both arms.”
Read: Why the stock market ushered in its worst start to a quarter in about 2 years
The quote
.@POTUS on Dow drop: “The problem in my opinion is Treasuries and the Fed. The Fed is going loco, and there’s no reason for them to do it.” @foxnewsnight pic.twitter.com/ioip364rtx
— Fox News (@FoxNews) October 11, 2018
“The Fed is going wild. I don’t know what their problem is, but they’re raising interest rates and it’s ridiculous.”—That was U.S. President Trump on Fox News late Wednesday, after making similar comments at a rally in Pennsylvania earlier in the day.
Some say, he’s right, and the Fed needs to cool it, while Mohamed El-Erian says don’t count on a market rout derailing the Fed. In any case, here’s what Trump’s tirade means for the markets
The market
No dip buyers rushing in just yet, with Dow YMZ8, -0.23% S&P 500 ESZ8, -0.06% and Nasdaq NQZ8, +0.68% futures swinging around, but still in the red.
Crude US:CLU8 is down, and the dollar DXY, -0.31% is off, with gold US:GCU8 up. The yield on the 10-year Treasury note TMUBMUSD10Y, +0.24% has eased back to 3.15%.
Check out the Market Snapshot column for the latest action.
Around the globe, bears have mauled Europe SXXP, -1.98% and Asia, where the Shanghai Composite SHCOMP, -5.22% skidded over 5% and the Nikkei NIK, -3.89% dropped near 4%.
Tencent is down over 7% today, poised for its worst drop of the year and biggest decline since October 2011. pic.twitter.com/p2EAPc4BnB
— Steven Russolillo (@srussolillo) October 11, 2018
Not to be left out, bitcoin BTCUSD, -4.99% and other cryptocurrencies are getting pummeled.
Read: Dr. Doom says bitcoin represents the ‘mother of all bubbles’
The chart
Here’s another look at what happened to China as that market just tanked:
And there’s been a bit of a surprise winner, as the Turkish lira USDTRY, -1.4202% is socking it to the dollar and the euro EURTRY, -0.9570% in the face of all this red flying around:
The buzz
While POTUS tosses shade at the Fed, it doesn’t seem that Treasury Secretary Steven Mnuchin feels exactly the same. “Markets go up. Markets go down,” he said in a Bali interview on the sidelines of an IMF meeting.
Big tech names are taking more heat this morning, led by Amazon AMZN, -1.88% Apple AAPL, +0.18% Netflix NFLX, -0.52% Meanwhile, Apple has scooped up engineers from European chip maker Dialog DLG, +27.06% in a $600 million deal.
Shares of Square Inc. were down hard in premarket after news late Wednesday that Chief Financial Officer Sarah Friar is leaving the payments firm to become chief executive at social-networking site Nextdoor.
We’re a day away from big bank earnings, with JPMorgan Chase JPM, -1.76% Citigroup C, -0.09% and Wells Fargo WFC, -0.21% on tap. But while investors are crossing their fingers for good news, that may be a tall order.
Read: Here’s why you should expect more ‘beats’ during this earning season
Tesla TSLA, -1.82% could be active after a judge refused to OK a settlement between CEO Elon Musk and the SEC, saying he wants both parties to explain themselves. Musk also dismissed the idea that he’s leaning toward outgoing Fox FOX, +0.99% chief exec. James Murdoch as new chairman.
As Micron Technology MU, +2.40% shares get crushed by this selloff, CEO Sanjay Mehrotra tells MarketWatch that a huge influx of devices that need memory and storage chips is driving demand like never before.
Consumer price data came in slower than forecast, while weekly jobless claims. The Federal budget is due later.
The stat
19 hours—That’s how long 161 passengers and 13 crew will be in the air for the world’s longest nonstop flight between Singapore and New York, operated by Singapore Airlines that takes off Thursday. It will be the first journey for the new, fuel efficient Airbus A350-900ULR, which has been loaded with 1,200 hours of audiovisual content.
Random reads
U.S., Russian astronauts forced to make an emergency landing after a booster malfunctions
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Two now confirmed dead as a result of Hurricane Michael
Woman who spent $21 million on luxury goods will have to tell a London court where she got the money
Lawyer for soccer star Cristiano Ronaldo says rape allegations are fabrications
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