Succinct Summation of Week’s Events 1.8.16 ( plus tips on the week's crash)

Sunday is the day I deliver the goods on the week's events and this past week has been quite special in an historic way.  In some quarters it's been characterized as the worst first week of a new year in Wall Street history.  So here's the lowdown in one convenient eye-shot plus a handy companion piece in which Mr. Ritholtz in his Washington Post column today pointed out the do's and don'ts of how to react to a crash like we've had this week.  Nothing earth-shattering here, which is to say it's all pretty common sense stuff, but there's never a more important time for a reminder for common sense calm than during times of panic.  Hope everyone had a great weekend.

Succinct Summation of Week’s Events 1.8.16

by Barry Ritholtz - January 8th, 2016, 3:30pm

Succinct Summations for the week ending January 8th, 2016

Positives:

1. Nonfarm payrolls came in at 292k vs the 200k expected. Last month was revised up from 211k to 252k.
2. U.S. job openings increased by 430k to 5.8 million, above the 5.3 million expected.
3. ADP employment came in at 257k vs the expected 190k and up from 217k previously.
4. ISM non-manufacturing index fell from 56.2 to 55.3, still a positive reading.
5. Initial jobless claims came in at 277k, the 4-week moving average fell to 275.75k.

Negatives:

1. The S&P 500 fell 5% to this week, the worst start to a year ever.
2. PMI Manufacturing came in at 51.2, down from 52.8 previously.
3. Auto sales fell 5% to an annualized rate 0f 17.3mm.
4. ISM Manufacturing came in at 48.2, below the 49.2 expected and down from 48.6 previously.
5. Construction spending fell 0.4% m/o/m vs a 0.7% expected rise.
6. Factory orders fell 0.2% in m/o/m, down from the 1.5% rise previously.
7. MBA mortgage application index fell 27% w/o/w.
8. PMI services index fell to 54.3, down from 56.1 previously

Category: Markets

The do’s and don’ts of a market crash - The Washington Post

The DOs and DONTs of Market Crashes

by Barry Ritholtz - January 10th, 2016, 10:00am

My Sunday Washington Post Business Section column is out. This morning, we look at the “DOs and DONTs of Market Crashes.” The print version had the headline “Do’s and don’ts of a big crash,” which is kinda funny, considering we are barely off of the highs by 10%.

Here’s an excerpt from the column:

“As of this writing, U.S. markets are down about 5 percent for 2016. European bourses are off about the same amount, as is Asia. China, whose market crash started this all off, is down 12 to 15 percent.

Given this week’s surprise, and how it cascaded around the world, it is as good a time as any to discuss what you should — and should not — do during a crash. (Print out this column. Read it again when the next one comes along).”

As I note in the piece, there are some specific DOs and DONTs of any sort of correction or crash, an we detail them:

DOs and DONTS of a market crash

1. DO notice how cyclical markets are
2. DONT react emotionally
3. DO stick with your plan
4. DONT rely on gurus, shamans or talking heads
5. DO note your own state of mind
6. DONT take actions while in a state of discomfort
7. DO notice the panic around you
8. DONT try to time the markets
9. DO look for signs of capitulation
10. DONT confuse the short term for the long term

Bonus: DO have a sense of humor

The key takeaway are all common sense observations as to what gets investors into trouble, and why they must avoid these bad behaviors.

Go read the whole thing . . .

The do’s and don’ts of a market crash - The Washington Post