Economy

The strategic analyst who called it “the 2008 crisis” says market volatility is a sign that “something is lurking”

Is it time to “get out of the dodge”?
Courtesy Everett Collection

The ups and downs in the stock market over the past few weeks have not been pleasant to anyone – although they help keep financial journalists working.

Here’s another idea. The latter pattern may be more than just an ordinary course of action – and it is something you should pay attention to.

“After that lint A crowd out of nowhere yesterday, I’m starting to think about how the current market pattern of instability and volatility is very similar to what we saw in January and February of this year, wrote David Rosenberg, an old strategist who now runs his own company, Rosenberg Research.

Rosenberg is often known as the bear, and he has had a half-full look through most of this year. But it is also known as Anticipate the mortgage crisisEven while working for one of the biggest catalysts – and victims – of the bubble, Merrill Lynch.

The biggest move in the Dow Jones Industrial Average
DJIA,
-0.15%And the
2020

January 27

453 points

January 31

603 points

February 4

+407 points

February 5

+483 points

February 24

-1,031 points

February 27

1,190 points

February 28

357 points

March 2

+1,293 points

March 3

785 points

March 4

+1173 points

September 3

807 points

September 9

+439 points

September 10

– 405 points

September 14

+327 points

September 21

509 points

September 23

525 points

September 25

+358 points

September 28

+410 points

Source: Rosenberg Research

While investors around the world were aware of the new coronavirus in January and February – few people predicted how bad it would get. Rosenberg also notes that markets “fell” in February, but only ended up “to their lowest levels when the Fed, Treasury and Congress joined forces to engage in the most intense easing policy ever”.

Veteran investors sometimes like to tie the bond market to signals and stocks with noise.

But Rosenberg believes the recent fluctuations in the stock market should be a cause for concern.

Does this behavior seem normal to you? Asked. “Do you think the cause of all this volatility? Could it be an indication that there is something lurking in the corner?”

It is unclear what this “thing” could be, despite the long list of headwinds, from the US presidential election to Brexit without a deal to the seemingly endless series of natural disasters. Underneath all of that, there is a spike in the number of global COVID-19 cases that could overwhelm health systems and weaken economies – and which forecasters expect will only get worse with the return of winter.

“The fatigue has started, people are getting dirty,” Rosenberg wrote, “but the impact on economic activity is still a burden.” “And as we go into fall and then winter, that could get worse. Market volatility, as at the end of the year, is telling you to exit Dodge – as it is in, de-risking.”

read the following: David Rosenberg says: “ The stock market no longer thinks it needs the economy if it has the Fed

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Thelma Binder

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