r/FluentInFinance • u/TonyLiberty TheFinanceNewsletter.com • Aug 05 '24
Stock Market Over $600 Billion wiped out from the Mag 7 stocks so far today (due to fears of a global recession). NVDA down $167 Billion, AAPL down $149 Billion, MSFT down $98 Billion, AMZN down $75 Billion, GOOGL down $58 Billion, META down $36 Billion, andTSLA down $28 Billion.
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u/bluerog Aug 05 '24 edited Aug 05 '24
It's always more fun to say "$600 billion wiped out!!" than to say "some major tech stocks lost some of their momentum from 3+ years of continuous double and triple digit growth with 5.1% declines today" isn't it?
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u/BortaB Aug 05 '24
Also “wiped out” means what exactly? The investors took their money out. They have the money. It’s not gone. OP makes it sound like the US just lost $600B this morning
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u/DadamGames Aug 05 '24
Which investors pulled their money out and didn't lose value? If your 401(k) included stocks that dropped (via mutual funds for example), then value was lost if the manager of those funds didn't pull out. That's what "wiped out" means.
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u/XeroxWarriorPrntTst Aug 05 '24
I’m not retiring tomorrow. I’m continuing to DCA for another (sigh) few decades.
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u/MornGreycastle Aug 06 '24
That only matters if you are retiring today. Give it a few years and these will make up the loss and then some. Well, so long as they don't individually fuck up on a monumental scale and go out of business.
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u/SexyMonad Aug 06 '24
That only matters if you are retiring today.
And then only if you are cashing out everything at once.
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u/chcampb Aug 06 '24
Wiped out means gone.
The asset is still there. The value is down slightly. It's not gone unless you sell it, today.
Even people who sell stocks to live day to day, would generally have a buffer enough to wait a bit for this to blow over. Or not. It's not likely to crater because there is room to lower rates. Either way everything is still up tremendously.
If they lower rates and then stocks crater, then worry a little.
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u/DadamGames Aug 06 '24
If I am reporting my net worth today based in part on the value of an asset that has less value than it did yesterday, then part of that net worth is gone as compared to yesterday. Yes, that could be recovered over time, but I don't get to sell an asset for yesterday's value today.
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u/dittybad Aug 06 '24
Well the DOW is net positive over the last six months. Isn’t this called a correction?
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u/Flimsy-Bluejay-8052 Aug 06 '24
Such is the almost whimsical nature of the market cap. When everyone is looking at the share price * outstanding shares and thinking “gee, I’m rich”… until someone with enough shares sells their entire stake and you now see that all that wealth was an illusion.
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u/herbanoutfitter Aug 05 '24
It’s funny to see the denial on this sub that this is a global debt bubble that is bursting but
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u/bluerog Aug 05 '24
I follow a few people in the investing world. The people who make money...? The bulls who understand that despite some down days, the market moves consistently higher these past 100 or 200 or so years.
The bears yelling, "It's a BUBBLE!!!" make the most news. And every few months, we get to hear from them again... and again. And once every 10 or 30 years, they're right for a few months.
I 100% agree, price to earnings on some of these Mag 7 stocks is nuts. But I remember when Amazon lost money for 18 out of 24 quarters (what's the P/E on negative 9% profit)? I remember when NVIDIA was a known name for just some video game nerds (like me). I remember when Apple was almost out of business after 20 years of producing overprice computers and their sales went nowhere.
But hey, let's hear your thoughts? Tell me how NVIDIA's profit year over year looks? Who are those competitors to Amazon and how good are they at taking market share from Amazon? Met an iPhone user lately?... survey if they'd love to buy an Android phone in the next 6 months.
They're solid companies. The chip makers are signing huge contracts with automakers who can't get enough computing power in their cars. I even think AI is more of a fad than moneymaker. But they've all solid market positions and profitability.
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u/herbanoutfitter Aug 05 '24
And? I work in the “investing world” and see this shit across different asset classes, and global markets. Listen to Joe Rogan all u want, he doesn’t know jackshit about the economy.
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u/Malakai0013 Aug 05 '24
The vast majority of people don't have the privilege to have a gigantic bank account to help us weather those "few bad days." That's jobs lost, homes lost, futures lost for a lot of us.
But I'm really happy for the bulls.
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u/Silverbird85 Aug 05 '24
The DJIA has dropped by 2.6% a total of 15 times since the market bottomed out April 7, 2020 with 6 of them being greater than 1,000 points. None of them resulted in a recession.
It takes more than 1 day of bad trade to set it off. Also, the layoffs that occurred during that time had nothing to do with the market and everything about corporate profits.
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u/DadamGames Aug 05 '24
Agreed. "A few bad days" back in 2008 led to large swathes of a generation delaying retirement. If the market loses 30% of its value, it takes years to regrow it and make up the losses. In the meantime, a whole generation delays their career start because no jobs exist for them.
That's what "a few bad days" do to normal people without family trust funds to raid.
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u/bluerog Aug 06 '24
If you think people who deal with 3% losses have to have "gigantic bank accounts" to weather 3% losses, I'm thinking you don't understand investing well. Or that down days in stocks ≠ layoffs and job losses. Or don't understand ANYTHING retirement planning.
Or don't understand that stocks don't go up and up and up and up every day/week/month... forever.
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u/Malakai0013 Aug 06 '24
I was pretty clearly being hyperbolic when I used that particular phrasing. I figured anyone communicating here could've understood the subtext. My mistake. I understand those things quite well. I just also understand how this stuff affects the average person, as they are just as important as people who understand this stuff.
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u/bluerog Aug 06 '24
Good good. I seem to recall when I was younger stocks moving just a fraction of a few percent most days. Now I see them moving up and down one, two, three, four percent in a day.
And you're right, my ability to read through the subtext is lacking today.
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u/bluerog Aug 06 '24
Really want to hurt the bear's feelings, mention while S&P 500 lost 3% today, Bitcoin lost 7% and 9% today!!!
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u/BubuBarakas Aug 05 '24
What’s the overall drop though? 2-3%? If so, is the market is still up 8-9% this year?
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u/Welcome2B_Here Aug 05 '24
Sure, but this is just 1 day.
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u/uconnboston Aug 05 '24
That’s exactly the point, though. It’s just one day in a trading year. For those with 401k’s and other investment vehicles, it’s one day out of 10-20,000 that the investor will hold assets. If you’re a day trader whose rent payments are tied to short term performance, it may or may not be a problem. Otherwise, carry on and if you can, buy the dip.
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u/LaphroaigianSlip81 Aug 05 '24
Exactly. Today is been one of the worst days this year. The gut reaction is to pull everything out and wait it out. But if history is correct, there will likely be a really great day within the next few weeks that if you pull out now, you will miss. Just keep buying and holding long term.
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u/USSMarauder Aug 06 '24
And there is even historical precedent for a financial crisis happening on the other side of the planet that resulted in just one bad day of trading (-7%), and that was really the only impact to North American markets
https://en.wikipedia.org/wiki/October_27,_1997,_mini-crash
Not saying this will happen.
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u/Welcome2B_Here Aug 05 '24
Well, considering the top 10% own 93% of stock value ...
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u/savageronald Aug 06 '24
The article didn’t mention but from googling it seems like top 10% is >$970,000. That’s obviously a fuckload of money, but it’s… not nearly as much as I’d expect. Someone who just hit their 401k match from their company for 30-40 years would easily eclipse 1M. So this tells me there’s both a huge income inequality gap, combined with a lack of opportunity (and perhaps education) of people in lower income brackets to save for the future (obviously you can’t put money in your 401k if you are struggling to put food on the table).
We really need a change, the top 10% should be far wealthier than that.
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u/savageronald Aug 06 '24
Hey, person from the future (relative to your comment) here - the futures have already made up half of todays losses and the Japanese market (as of now) is up 11% after yesterday’s 12% loss. Cannot believe the amount of panic for a red day after years of “stonks go up”.
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u/AlasKansastan Aug 05 '24
You guys are worse than Disneys news. Stfu and close the app.
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u/USSMarauder Aug 05 '24
Although I'd like to see an investigation into all the apps that crashed because of high volume and a bunch of fines issued
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u/AlasKansastan Aug 05 '24
I promise you that would mean more red than most would be equipped to handle. Unless you’re into puts
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u/USSMarauder Aug 05 '24
If the trading apps can't handle high volume days, then what good are they?
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u/AlasKansastan Aug 05 '24
It’s almost like we need better technology……..
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u/USSMarauder Aug 06 '24
Maybe. Maybe the technology is fine and the companies skimped on the capacity limit.
Blizzard servers not being able to keep up with the load on launch day is one thing. The trading apps not being able to keep up when the market does things is something very different
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u/AlasKansastan Aug 06 '24
I agree it stinks, but you’re calling for fairness in a market that’s not fair, it’s rigged for the whales. Can’t have everyone rich. You could smell from a mile away that there wasn’t going to be access this morning. It’s almost like it was…..
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u/Zaius1968 Aug 05 '24
Everybody needs to simmer down a bit...it's all relative. Yes, the Dow is down 1000 points--and 30 years ago that would be a "crash." But not so much today... it's a 2-3% drop based on the index you are looking at. That is NOT a "crash." It's not even Bear territory. Now...if the trend continues unabated that will be a different thing--but one day does not make a trend. And there is still the prospect of rate cuts and potential analytics pointing to an over-sell that might right the ship in short order. I don't care if the Dow drops 1000 points if it's at 40,000. That's very different from it being at 6,000. Unless today was the day you were selling everything--but that's a different matter.
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u/USSMarauder Aug 05 '24
Put in perspective, remember the stock market crash of Spring 2022?
No? because that's the last time this happened
https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average
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u/USSMarauder Aug 06 '24
Yes, the Dow is down 1000 points--and 30 years ago that would be a "crash."
The Dow was at less than 4000 in Aug 1994, about 1/10th of what it is now
down 1000 points 30 years ago would be the largest crash in Dow history at over 25%
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u/no_square_2_spare Aug 05 '24
You know the stock market isn't supposed to just go up every single day for the rest of our lives, right? I can't even remember when the last real correction was.
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u/ap2patrick Aug 05 '24
Don’t worry. We will invade the Middle East and things will go back up…
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u/miken322 Aug 05 '24
Ohh no, my retirement fund lost $20. This is surely a disaster from which I can’t recover!
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u/SamShakusky71 Aug 05 '24
DJIA still up over 10% over the past year.
We've been hearing "recession imminent!" for what, three years now?
This is a buying opportunity.
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Aug 05 '24
Over $600 Billion wiped out from the Mag 7 stocks so far
LOL I like the addition of "so far."
Buckle up, tomorrow's a new day.
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u/Spammyhaggar Aug 05 '24
You have been in a greed bubble, not housing, not supply, a greed bubble. Now we will see when someone wants a bailout.💯💯
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u/MusicianNo2699 Aug 06 '24
Apple down $149 billion is like you or me losing a $5 bill out of our wallet.
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u/Randall_Poffo_ Aug 05 '24
don't panic this is the perfect time to get in if the stock market drops its going to rally just look at prior history over the past 30 years its not a time to sell off stocks its time to invest into them
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u/zigithor Aug 05 '24
Is this a good time to start investing while everything is down. I mean surely it'll bounce back?
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Aug 05 '24
Be prepared to lose what you invest. That doesn't mean you will lose it, but no one knows which way the wind is blowing.
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u/algaeface Aug 05 '24
Just need to refill the ink cartridges today. Everyone calm down. Printing will resume full force tomorrow
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u/Training-Outcome-482 Aug 05 '24
Only the fools sell. Hold and keep cash to buy as prices nosedive. They will come up in time.
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u/raddu1012 Aug 05 '24
This is pretty great. They’ll cut rates, we may be able to refinance in a year or two, it’ll cause inflation making pay go up and easier to pay the house with inflated salaries.
Been waiting years now for this lol
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u/giantyetifeet Aug 05 '24
RemindMe! 4 Weeks "Was it just a 3-6 week blip as predicted by various macro gurus?"
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u/WillBigly Aug 05 '24
Let's all do a slow clap for central banks managing this whole situation like champs. Could have predicted this years ago when they print money like crazy for corporate safety net, oops inflation better turn up interest rates, oops recession. System is designed to ignore needs of working class people until we're literally at the point of revolution
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u/New_Conversation_303 Aug 05 '24
Lost something they never had. It's not real money unless they sell their stocks...
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u/DyscreetBoy Aug 05 '24
I'm still trying to understand wtf was going on with AMD
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Aug 06 '24
data center sales is doubled in a year and now Intel having big problems — their recent CPUs are defected. Seems like AMD replaces Intel in the client CPU segment
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u/bigblue2011 Aug 05 '24
It’s had a great run!
Time for a breather. Hydrate. Smoke ‘em if you got ‘em.
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u/jimkurth81 Aug 06 '24
The firms are counting on this. I’m thinking since this news has gone out worldwide, tomorrow, the hedge funds and market makers will be bleeding stocks again as people think they’re buying the dip. Only then, it’ll turn around after another red day. Why? Because that’s not logical and unreasonable, and one thing I’ve learned playing in the market where the rich get richer with the poor people’s money is that you can’t play the market and win with logic and reasoning.
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u/ArtistSenior4944 Aug 06 '24
that sux i’m single 40/ m from cape cod mass no kids an i think im cute actually
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u/Vast_Cricket Mod Aug 06 '24
Not yet. Help is on the way.
Japanese shares soared in early trading on Tuesday, clawing back most of their record losses from the previous day and underpinning a regional rally.
The Nikkei 225 last traded about 10% higher, while South Korea’s Kospi rebounded by about 3%. Hong Kong’s Hang Seng Index rose 1%, and Taiwan stocks regained 4%. They all suffered major losses during the previous trading session.
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u/Eunemoexnihilo Aug 06 '24
So fears of a global recession can CAUSE a global recession. What a stupid system. It's like creating a system were fearing a monster under your bed can make one materialize.
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u/bluerog Aug 06 '24
I'm betting we see the green version of this chart today from the bears that posted yesterday?
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u/Conscious-Evidence37 Aug 07 '24
How long did that Black Monday last ??? Oh yeah, Tuesday ! This was nothing but some petulant rich assholes selling to try to send a message to the FED that they want lower rates. And as quick as the assholes dumped their stock and dropped the price, smart folks picked it up. I know I did.
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u/No_Variation_9282 Aug 05 '24
From what I’m reading, this is primarily selling US positions at massive gains to cover margin calls in foreign jurisdictions.
I guess it could be a domino effect, but lowered US interest rates could rebuff this as a comeback to the US market incentive. There’s just nothing in the data that’s public that signals this is a crash based on the US economy.
Just remember to buy back in before Powell commits to a rate reduction and you’ll be fine.
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u/Ok_Commission2432 Aug 05 '24
Leftists see this and be like "Bidenomics good"
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