U.S. stocks suffered their biggest decline in more than seven months Wednesday, as investors accelerated their retreat from fast-growing technology stocks in favor of shares that have been overlooked.
Major indexes have started the fourth quarter on their weakest footing since the beginning of 2016, and the swift fall has some investors wondering if this is a brief stumble or an overdue reckoning for U.S. stocks after months of outperforming global markets.
The rotation out of tech and other growth stocks—among the most popular trades of the year—to so-called safety stocks, such as utilities companies, was sparked in part by the recent jump in government bond yields and the Federal Reserve’s bid to tighten monetary policy.
But there have been other warnings signals that made investors nervous. Recent data has showed a slowdown in both housing and auto sales, both of which are closely watched indicators of U.S. economic health. Even more concerning: trade tensions between the U.S. and China appear to be worsening.
The result: A simultaneous selling of 2018’s biggest stock-market winners.
Leaders Up, Leaders Down
Unsustainable US Share
It Never Fails
There's that cash on the sidelines stupidity once again.
Mike "Mish" Shedlock