Blood on Wall Street

It was an ugly day in the markets with the Dow Jones Industrial Average down 832 points, or 3.15%, with the S&P 500 down 3.29% and the tech-heavy Nasdaq plummeting 4.08%. Days like today certainly are not a lot of fun but are a reality even during bull markets.

Last week interest rates shot up with the 10-year U.S. Treasury bond yield jumping from 3.05% to 3.24%, the highest yield on the 10-year since 2011. The S&P 500 is now down five straight days since this move occurred.

Let's not forget that in January of this year we saw the 10-year U.S. Treasury bond yield jump from 2.48% to 2.85%, which at the time was the highest yield since 2013. Stocks proceeded to fall over 11% into early February. It was a bloodbath, with five or six days of declines similar to what we saw today. However, over time the stock market digested that move higher in yields and went on to erase those losses and hit new highs.

Unfortunately, I do not have a crystal ball, well I do but it just shows me colors- not helpful here. Back to being serious, I do not have a crystal ball, but the decline seen over the last week is very similar to many stock market corrections in the past. And while the corrections are not enjoyable they play a pivotal part in a longer-term bull market.

I will have more to say later this week on the bigger picture, but for now know I am watching the markets and your portfolios very closely.