Daily Dispatches
A man stops and looks at Japan's Nikkei stock update on an electric board at a securities firm in Tokyo.
Associated Press/Photo by Junji Kurokawa
A man stops and looks at Japan's Nikkei stock update on an electric board at a securities firm in Tokyo.

Dollars and Sense: Just how long can this bull market go on?


Down week. The markets have been pretty easy to chart this year so far. Stocks dropped significantly in January. But they roared back in February, with the Dow recovering almost all its January losses and the S&P 500 recovering all it lost and more, setting a few new records. But between Monday and Thursday of this week, the market dropped about 500 points, moving March into negative territory, too.

Wondering why. The market sank every day this week, but each day’s drop had different reasons. Monday, for example, brought no big economic news, but Boeing shares fell 2.5 percent after safety concerns arose over the weekend that put pressure on its stock. That helped drag the Dow Jones industrial average lower, with Boeing the biggest loser of the 30 stocks making up the blue-chip index. A Malaysia Airlines Boeing 777 disappeared last weekend with 239 people aboard. In separate but related news, Boeing said it had discovered hairline cracks on the wings of 42 Dreamliner 787 jets that are still being built.

Not buying it? Of course, the drop of a single stock doesn’t send the markets down 500 points. In fact, on Monday and Tuesday, stocks kind of drifted. I could never prove this, but last Sunday was the fifth birthday of a bull market that has gained 178 percent since March 2009.  And I think a lot of traders are wondering just how long this can go on. Only five other bull markets since World War II have reached a sixth year without some sort of significant correction. So it’s not a matter of “if,” but “when”? We’re in a season when traders are startling at their own shadows. Every time markets go down for a day or even a few hours in a row, they wonder if now’s the time to sell and come back in after the correction. That’s why we’ve been seeing these 200-point, daily swings in the Dow.

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Now that’s ironic. All this jitteriness is particularly interesting as it comes in the face of pretty good economic news. The Labor Department said this week the number of job openings rose 1.5 percent to 3.97 million. That was close to November’s five-year high, and it means job openings have returned to pre-recession levels. Staffing company Manpower does an employment outlook survey, released this week, and it reported more employer optimism than we’ve seen in years. Retail sales rose 0.3 percent in February, and new claims for unemployment benefits dropped to 315,000, a number that signals sustained job creation.

Global concerns. But bad news from overseas trumped good news here at home. Lingering concerns over a possible economic slowdown in China and building tensions in Ukraine continued to weigh on global markets. Both Germany’s DAX and London’s FTSE index saw drops this week. On Wednesday, Hong Kong’s Hang Seng dropped 1.7 percent and Japan’s Nikkei fell a dramatic 2.6 percent. Again, no major economic news. Just general jitteriness.

Will jitters continue? We do get more economic reports from the United States this week than last, including the Consumer Price Index and Housing Starts. Both are due out on Tuesday. If these reports all point upward, they could cure the jitters, but if they’re lackluster or negative, I expect this caffeine rush the markets are on could continue.

Warren Cole Smith
Warren Cole Smith

Warren is vice president of mission advancement for The Chuck Colson Center for Christian Worldview and the host of WORLD Radio’s Listening In. Follow Warren on Twitter @WarrenColeSmith.


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