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“There are no facts, only interpretations.” – Friedrich Nietzsche
The Nasdaq is looking to brush the dust off its shoulders after a major beatdown in the high growth area of technology to kick off the week yesterday. S&P 500 futures are also up nearly one percent as the DJIA lags. For now, fixed income markets are cooperating as yields pull back, but we’ll see if these levels can hold throughout the trading day.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, including revised OECD economic forecasts, trading in overseas markets, Japanese economic data, an update on the latest national and international COVID trends, including our series of charts tracking vaccinations, and much more.
Yesterday was another wild day in the stock market. Depending on your perspective and your benchmark, it was either a good day or a bad day. From the perspective of the DJIA, which was up 0.97%, the week didn’t start off all that bad, but for an investor who follows the Nasdaq, this week started off much differently with a decline of 2.4%.
That kind of divergence where the DJIA is up and the Nasdaq drops over 2% on the same day is pretty uncommon. The charts below show the performance of both indices going back to 1986, and in each one, we have included red dots to show all the occurrences where the DJIA was up and the Nasdaq was down over 2%.
In this span, every prior occurrence was confined to three separate periods. While there were two separate occurrences right after the 1987 crash, there wasn’t another until 1999, when there were three between April and June. After that, the frequency of occurrences really picked up as there were 23 in 2000 and another 7 in 2011. After that, the two indices went nearly another 20 years until July 2020 without any similar occurrences, and now this year, there have been two since 2/22.