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What’s the Market Doing?

I had a couple of random thoughts that got me outta my morning groove.  The Dow popped up and got me to thinking about why it hasn’t fallen more. When you look at the chart you can see the Dow dropped by almost half, from roughly 14,000 to around 7,000 over the course of, say 15 months or so from Q3ish 2007 to Q1ish 2009.  It was a study decline. 2007 was the highwater-mark and the slow decline was all financial related to the ultimate crash. This was the financial crisis in Q3-2008 and the bottoming out of the market in Q1-2009.  So, it was a slow decline.

What’s kinda interesting is that during that recession, we never got to 33,000,000 people unemployed or filing unemployment claims.  We never had wholesale multiple industry segments completely shut down. I mean, the banking industry and the related mortgage industry are a big deal but it seems what’s happening now is more severe.  It seems like the market doesn’t think it will last past a quarter or 2? 

We’re in a recession, clearly. I think we have a timing issue. What I mean is the market reacts to earnings results and projections.  Those are reported quarterly and we get the projections from the earnings calls that happen in the month following the close of the quarter. Q1 results and the projections for the rest of the year didn’t happen until April.  I don’t think anybody understood how bad it was going to get. The full economic impact across all companies won’t be “reported” until the end of Q2, on the July calls. 

It will be interesting to see what happens.

I’m not giving any advice or in anyway acting as an advisor.  Just my random thoughts and opinions.

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