Dow drops more than 450 points; S&P 500 posts worst day since January on worries over economy

[Yo_Mama_Been_Loggin]

Stocks dropped on Friday as investors worried global economic growth could slow down following the Federal Reserve's cautious outlook from earlier in the week and weak overseas data.

The Dow Jones Industrial Average closed 459 points lower as bank stocks fell on an inverted yield curve, which some investors see as a signal of a recession coming. The S&P 500 fell 1.9 percent and notched its biggest one-day drop since Jan. 3. The Nasdaq Composite declined 2.5 percent as shares of Facebook, Amazon, Netflix, Alphabet and Apple all closed lower.

"There's a host of worries out there and those worries continue to mount," said Peter Cardillo, a chief market economist at Spartan Capital Securities. "The fear of recession is increasing. ... As a result, we have a market that is rethinking some of the optimism that was priced in."

The spread between the 3-month Treasury bill yield and the 10-year note rate turned negative for the first time since 2007 — thus inverting the so-called yield curve — according to Refinitiv Tradeweb data. An inverted yield curve happens when short- term rates surpass their longer-term counterparts. This is considered by investors as a trustworthy indicator of a recession coming in the near future.

https://www.msn.com/en-us/money/markets/dow-drops-more-than-450-points-sandp-500-posts-worst-day-since-january-on-worries-over-economy/ar-BBV5g27?li=BBnbfcN

[at140]

1. Because of interest rates inversion news

That portends recession is near.

[Johnny2X2X]

3. Inverted yeild curve

3 month bonds yield is higher than 10 year.

It doesn't mean a whole lot at face value, but the conditions that lead to it predict a recession. All of the last 7 recessions were predicted by this Inversion, so it's considered the best predictor we have.

[at140]

4. I am preparing for a nice deep recession

By accumulating some dry powder...actually hope it happens in sept-oct 2020..for obvious reasons

[LanternWaste]

5. The yield curve is merely one of the early indicator

Typically, the yield curve indicator is early, and often, early can be as good as wrong. Saying that there will be a recession at some point in the future is obvious. Recessions are a fact of life. Yet, of course, we never fully know when. In fact, often it's not clear a recession is happening when we're in the early stages of one.

A negative yield curve has historically been reached 2-3 years before a U.S. recession is officially recognized.

[Johnny2X2X]

6. 12 months on average.

12 months is the average.

[ck4829]

2. Kick