This report was originally published by Michael Snyder at The Economic Collapse
Stock markets are crashing all over the world, we are seeing extremely violent “flash crashes” in the forex marketplace, economic conditions are slowing down all over the globe, and fear is causing many investors to become extremely trigger happy. The stock market crash of 2018 wiped out approximately 12 trillion dollars in global stock market wealth, but things were supposed to calm down once we got into 2019. But clearly that is not happening. After Apple announced that their sales during the first quarter are going to be much, much lower than previously anticipated, Apple’s stock price started shooting down like a rocket and by the end of the session on Wednesday the company had lost 75 billion dollars in market capitalization. Meanwhile, “flash crashes” caused some of the most violent swings that we have ever seen in the foreign exchange markets…
It took seven minutes for the yen to surge through levels that have held through almost a decade.
In those wild minutes from about 9:30 a.m. Sydney, the yen jumped almost 8 percent against the Australian dollar to its strongest since 2009, and surged 10 percent versus the Turkish lira. The Japanese currency rose at least 1 percent versus all its Group-of-10 peers, bursting through the 72 per Aussie level that has held through a trade war, a stock rout, Italy’s budget dispute and Federal Reserve rate hikes.
This is the kind of chaos that we only see during a financial crisis.
Investors are also being rattled by the fact that China just experienced its first factory activity contraction in over two years…
The People’s Bank of China said on Wednesday evening it had relaxed its conditions on targeted reserve requirement cuts to benefit more small firms.
The move came after China reported its first factory activity contraction in over two years in December. A long-term Chinese slowdown would cause global havoc.
But of course the biggest news of the day was what happened to Apple. The Dow Jones Industrial Average was down 660 points on Wednesday, and the huge hit that Apple took was the biggest reason for that decline.
Including the 75 billion dollars that was just wiped out, the value of Apple has now fallen by 452 billion dollars since October 3rd…
In only three months, Apple has lost $452 billion in market capitalization, including tens of billions on Thursday as the tech giant’s stock sank further.
Apple shares have fallen by 39.1 percent since Oct. 3, when the stock hit a 52-week high of $233.47 a share. With its market cap down to about $674 billion, those losses are larger than individual value of 496 members of the S&P 500 — including Facebook and J.P. Morgan.
Ironically, the truth is that Apple is actually one of the strongest companies on Wall Street financially. It is just that the company was priced well beyond perfection, and so any hint of bad news was likely to cause a decline of this magnitude.
The amount of paper wealth that stock market investors have just lost is absolutely staggering. To put this in the proper perspective, here are some more facts about the money that Apple investors have lost that come from CNBC…
- more than double the size of Wells Fargo
- more than three times the size of McDonald’s
- more than five times the size of Costco
- more than 10 times the size of Raytheon
At this point U.S. financial markets are hypersensitive to any piece of bad news, and the fact that Apple sales are way down in China is definitely bad news.
One analyst said that this was “Apple’s darkest day in the iPhone era” and he expressed his opinion that “the magnitude of the miss with China demand …was jaw-dropping.”
Of course Apple is far from alone. Economic activity is slowing down substantially all over the planet, and on Wednesday we learned that U.S. factory activity just declined by the most since the last recession…
Beyond Apple, investors were also rattled by the biggest one-month decline in US factory activity since the Great Recession. The closely-watched ISM manufacturing index tumbled to a two-year low, providing further evidence of slowing growth and pain from the US-China trade war.
In addition, both of Bloomberg’s economic surprise indexes have “turned negative for the first time since Trump was elected”.
The hits just keep on coming, and it is becoming quite clear that this is going to be a very tough year.
As this crisis continues to escalate, keep an eye on our big financial institutions. Italy’s tenth largest bank just imploded, and it is likely that we will see more financial dominoes start to topple as the losses mount.
Over the past decade, there have been other times when Wall Street has been rattled, but those episodes only lasted for a few weeks at the most.
It has now been three months, and this new crisis shows no signs of abating any time soon.
What that means is that we are in a heap of trouble. Because once this giant financial avalanche fully gets going, it is going to be impossible to stop.
For the moment, I think that this current wave of panic selling is subsiding and that Friday will be better for investors. Of course the markets are so jittery at this point that a single piece of bad news could instantly send them tumbling once again. But barring any bad news, hopefully things will be calmer on Friday.
There will be good days and there will be bad days in 2019.
There will be ups and there will be downs.
But it has become exceedingly clear that the downturn that so many have been anticipating has finally arrived, and the financial crisis of 2019 looks like it is going to be a doozy.
***
Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.
Michael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream.
If you want to know what is coming and what you can do to prepare, read his latest book [amazon text=Get Prepared Now!: Why A Great Crisis Is Coming & How You Can Survive It&asin=150522599X].
I like it when the stock market gets honest.
Why is the investing general public so afraid of Reversion to Mean ?
It’s a normal process that describes PE ratios.
PE Ratios are now sky-high, over 100 for mature companies.
Procter & Gamble is one example of a mature company. Their PE is 24.
Microsoft is another example. Their PE is 41.
Long term investors should not be afraid of reversion to mean. They should take money off the table when PE’s are in bubble territory, then buy the genuine bargains when everybody is terrified because “the market crashed”.
God, what would people do if PE’s over-corrected on the downside ?
>> PE Ratios are now sky-high, over 100 for mature companies.
PS, referring to the FAANG bubble stocks, NASDAQ, etc.
Intel’s PE is 14 this morning – once that crashes to under 10, it might be a Buy.
What’s happened is this kind of investing mismanagement by states with pension funds is partially causing bankruptcies as these workers like teachers retire after 40 years of service and then the pensions are going belly up due to market losses. This is happening in 30+ states and this alone would cause chaos and SOON.
Well, it’s still early and things may improve, but so far today the market is only up about 600.
People aren’t checking their 401k statements, they are just several years from retirement. Can’t feel sorry for stupidity. Should have pulled out 100% into treasuries like we did the same day of 9/11 disaster, retired two yrs later. I quit giving anyone advice for sometime. People just don’t believe anything or even care. Have “ghosted” some people, no time for morons now days.
The “Stock Market Crash of 2018” is pure hyperbole. The DOW was at 19700 in January 2017…just two years ago. It’s around 23400 right now. That’s nothing more than a correction. Ten years ago it was 8000. But the word “correction” doesn’t translate into as many clicks.
If you put money in an index fund for the last ten years, you are doing good. I hate to say it, but precious puked since 2011 while the casino paid better. I know…I have a lot of expensive PMs laying at the bottom of the lake…
Some people think their money stack always has to get bigger and damn everybody else. The curse of predatory capitalism while no holds are barred. The endgame was more than obvious back decades. When it comes to the peoples rights being whittled away you have no right to oppose with the disguise of national security reducing Americans to little more than voiceless enemies of the two party checkmate.
like I could give a Roger Rabbit Rat’s ASS.
The greed monster took a bite of Apple. Better keep that greed monster well fed or it will turn on you.
Wall Street will be setting new record highs by July 4th. US Govt spending is increasing regardless of that the FED does, and all that money goes through Wall Street.
A pessimist is realist who refuses to see the perpetrated lies of the Casino Establishment. Every stockmaket player that I used to know, no longer play in the same Club. And for those who still play in this Casino, let me tell you, you, you have a deeply rooted problem and you’re addicted. China is not a Casino player, they’re 100-Fold smarter then this. China is not a Democracy, Their Stock Ownership is Deeply Rooted inside the National Currency. They “are” Their Own Stock Investors, They “Own” Their Corporations, Not Bipolar Independent Indecisive Investors. They “Know” WtF their Doing….
Having said that, Bring America Back to America, by Starting your Own Production Lines Here, Not in China….! And Work Hard for your Money, Instead of some Yahoo Stock Investors from God Knows what Country.
Here is the rest of the Article………
The “Stock Market Crash Of 2018” Is Rapidly Transforming Into “The Financial Crisis Of 2019”
Michael Snyder
January 4th, 2019
Stock markets are crashing all over the world, we are seeing extremely violent “flash crashes” in the forex marketplace, economic conditions are slowing down all over the globe, and fear is causing many investors to become extremely trigger happy. The stock market crash of 2018 wiped out approximately 12 trillion dollars in global stock market wealth, but things were supposed to calm down once we got into 2019. But clearly that is not happening. After Apple announced that their sales during the first quarter are going to be much, much lower than previously anticipated, Apple’s stock price started shooting down like a rocket and by the end of the session on Wednesday the company had lost 75 billion dollars in market capitalization. Meanwhile, “flash crashes” caused some of the most violent swings that we have ever seen in the foreign exchange markets…
It took seven minutes for the yen to surge through levels that have held through almost a decade.
In those wild minutes from about 9:30 a.m. Sydney, the yen jumped almost 8 percent against the Australian dollar to its strongest since 2009, and surged 10 percent versus the Turkish lira. The Japanese currency rose at least 1 percent versus all its Group-of-10 peers, bursting through the 72 per Aussie level that has held through a trade war, a stock rout, Italy’s budget dispute and Federal Reserve rate hikes.
This is the kind of chaos that we only see during a financial crisis.
Investors are also being rattled by the fact that China just experienced its first factory activity contraction in over two years…
The People’s Bank of China said on Wednesday evening it had relaxed its conditions on targeted reserve requirement cuts to benefit more small firms.
The move came after China reported its first factory activity contraction in over two years in December. A long-term Chinese slowdown would cause global havoc.
But of course the biggest news of the day was what happened to Apple. The Dow Jones Industrial Average was down 660 points on Wednesday, and the huge hit that Apple took was the biggest reason for that decline.
Including the 75 billion dollars that was just wiped out, the value of Apple has now fallen by 452 billion dollars since October 3rd…
In only three months, Apple has lost $452 billion in market capitalization, including tens of billions on Thursday as the tech giant’s stock sank further.
Apple shares have fallen by 39.1 percent since Oct. 3, when the stock hit a 52-week high of $233.47 a share. With its market cap down to about $674 billion, those losses are larger than individual value of 496 members of the S&P 500 — including Facebook and J.P. Morgan.
Ironically, the truth is that Apple is actually one of the strongest companies on Wall Street financially. It is just that the company was priced well beyond perfection, and so any hint of bad news was likely to cause a decline of this magnitude.
The amount of paper wealth that stock market investors have just lost is absolutely staggering. To put this in the proper perspective, here are some more facts about the money that Apple investors have lost that come from CNBC…
more than double the size of Wells Fargo
more than three times the size of McDonald’s
more than five times the size of Costco
more than 10 times the size of Raytheon
At this point U.S. financial markets are hypersensitive to any piece of bad news, and the fact that Apple sales are way down in China is definitely bad news.
One analyst said that this was “Apple’s darkest day in the iPhone era” and he expressed his opinion that “the magnitude of the miss with China demand …was jaw-dropping.”
Of course Apple is far from alone. Economic activity is slowing down substantially all over the planet, and on Wednesday we learned that U.S. factory activity just declined by the most since the last recession…
Beyond Apple, investors were also rattled by the biggest one-month decline in US factory activity since the Great Recession. The closely-watched ISM manufacturing index tumbled to a two-year low, providing further evidence of slowing growth and pain from the US-China trade war.
In addition, both of Bloomberg’s economic surprise indexes have “turned negative for the first time since Trump was elected”.
The hits just keep on coming, and it is becoming quite clear that this is going to be a very tough year.
As this crisis continues to escalate, keep an eye on our big financial institutions. Italy’s tenth largest bank just imploded, and it is likely that we will see more financial dominoes start to topple as the losses mount.
Over the past decade, there have been other times when Wall Street has been rattled, but those episodes only lasted for a few weeks at the most.
It has now been three months, and this new crisis shows no signs of abating any time soon.
What that means is that we are in a heap of trouble. Because once this giant financial avalanche fully gets going, it is going to be impossible to stop.
For the moment, I think that this current wave of panic selling is subsiding and that Friday will be better for investors. Of course the markets are so jittery at this point that a single piece of bad news could instantly send them tumbling once again. But barring any bad news, hopefully things will be calmer on Friday.
There will be good days and there will be bad days in 2019.
There will be ups and there will be downs.
But it has become exceedingly clear that the downturn that so many have been anticipating has finally arrived, and the financial crisis of 2019 looks like it is going to be a doozy.