S&P 500 and Stock Markets Worldwide Close Out Worst Year Since 2008

[cybersofts]

Stock markets worldwide, including Dow Jones, Nasdaq and the S&P 500, have posted disappointing yearly returns, with many indexes being compared to their performance during the financial crisis.

The S&P 500 is down 6.2% for 2018, while the DOW Jones Industrial Average is down 5.6% for 2018. These numbers, compared to the financial crisis, where the indexes posted yearly losses of 38.5% and 33.8% are a new low given the general bull sentiment surrounding markets going into 2018.

While the S&P 500 was up 9% during the first three quarters of 2018, it has marked a new milestone of ending the year in the negative digits at -6.2%. This is the first time the S&P closed negative digits on the yearly after rising for the first three quarters. Similarly, the NASDAQ composite fell 3.9% for 2018.

The main catalyst for this drop is said to be the sell-off that began in October.

There have been widespread concerns of an economic slowdown, along with fears that the Fed is making incorrect decisions with respect to monetary policy.


S&P 500 Down Year Over Year
The S&P 500 was on a great run throughout 2017, opening at around 2240 points and ending the year at 2674 points.


S&P 500 2017 performance

However, 2018 brought with it a lot of volatility, sharp trend reversals along with increased political tensions.

The trade war between US and China has resulted in fluctuating stock markets throughout 2018. However, recent developments indicate that the disputes might soon be resolved, as early as March 2019. This might be a good fundamental catalyst for markets worldwide. A trade agreement being chalked out might come into effect in March 2019.


S&P 500 2018 Performance

Markets in London experienced a similar downturn, with the FTSE 100 index posting a yearly drawdown of 12%. This contrast to the record high of 7859 points that the Index posted earlier this May.

There are several reasons the FTSE dropped severely during 2019. To begin with, trade tensions between US and China have affected stock markets globally. Secondly, the uncertainty surrounding Brexit and concerns regarding US interest rates provoked a selloff within markets in UK.


Asia
Chinese stock markets took the worst hit, with the CSI 300 benchmark dropping nearly 27% at market close on December 27th. The primary cause for this drop is said to be the ongoing trade dispute with the Unites States.

Hong Kong’s HSI Index lost 13.6% this year, its worst since 2011 when it lost 19.97%

Similarly, Japan’s Nikkei 225 Index lost 12.1% during 2018, its worst since the financial crisis.


Reference: https://www.ccn.com/sp-500-and-stock-markets-worldwide-close-out-worst-year-since-2008/

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[randythered]

With all of the political ongoings in major countries it's to be expected that there would be a knock-on to stock markets as uncertainty spreads. Brexit was already mentioned and I also believe that trumps politics will also have a large influence here. With little to suggest this uncertainty will clear up in the coming months I expect a tough beginning to 2019 for stock markets worldwide.

[Crypdon]

Crypto is related to the stock exchange so it's not surprising that bitcoin took a real battering in 2018. However, smart companies will buy up cheap stocks and now bitcoin so a recovery will begin in Q1 2019

[davis196]

Crypto is related to the stock exchange so it's not surprising that bitcoin took a real battering in 2018. However, smart companies will buy up cheap stocks and now bitcoin so a recovery will begin in Q1 2019

That's not guaranteed.Crypto isn't related to the stock exchanges.The people and companies,that trade stocks trade crypto as well.This is the only link between crypto and stocks.
Smart companies won't buy all cheap stocks.They will buy only cheap stocks of companies with potential.
Crypto is not a stock.

[elda34b]

That's not guaranteed.Crypto isn't related to the stock exchanges.The people and companies,that trade stocks trade crypto as well.This is the only link between crypto and stocks.

In some crypto group that I joined, they posted several graphs/articles about Bitcoin and stock/traditional asset price movement, and they claim they're related. I do believe professional traders who use both asset to make profits sometimes enter and exit both market at nearly the same time, but of course not so blindly. Still, graph is just a graph.

[avikz]

I won't say this slowdown is a fault of the businesses worldwide, it's more of political issues than business issues. With Trump become the president of US, this kind of situation was well envisaged by the specialists. Fed is doing their job by not listening to Trump and on the other hand Trump wants the interest rate cut because of populist votebank, resulting the resignation of Fed Reserve Head.

Since US is the most economically powerful country of the world, the impact is seen in the markets worldwide. We won't see much recovery till the time Trump sits on the chair that rightfully belongs to a more matured politician. If Trump decides to end the duty war with China and stops threatening Iran, the situation may recover. The world still runs of oil and Iran sits over 10% of the world petroleum reserve. Keeping these facts in mind, I don't see much hope for the market until next presidential election when a more matured person takes over the hot seat and plays wisely instead of impulsively!   

[Naida_BR]

We are on the verge of an economic downturn and this is the major reason of this market decline. We have passed years of economic growth (we even saw negative discount rates at the start of this year). Economies are moving like a cycle when they go up then they go down and vice versa. Investors are afraid that the economic downturn is inevitable and along with political instability around the globe, this is getting more intense.

[Sengoko]

2018 wasn’t really good for any market. I don’t buy stocks but judging from cryptocurrency market it was a very bad one. The price dropped heavily, below what most of the investors expected and a lot of people has been complaining about it. I didn’t achieve up to half of what I planned last year, hope this year gets better.

[arpon11]

If stocks market became worst in 2018 since 2008, are we heading towards another financial crisis like it happens in 2007 and 2008? I think the world should prepare for another  Economics' crisis.  I think we  should not look at the worst under perform investments sectors in 2018 but we should look at other bitcoin as the best altinative for forex and stocks market in the area of investments and safe heaven. 
I pray that we have a change of situations in 2019 and both stocks, forex and cryptocurrencies recover.  I believe also that 2019 is going to be great and now may be the last time we see price like this.

[el kaka22]

I love how OP started out "worldwide" but only mentioned american stocks. To be honest london stock exchange fell as well, it started out the year high, went down, went even higher and than went down again. All the big ones like french one and italian one and all that went down this year.

Even german dax went down this year and thats a big thing considering german economy has been on the prosper for the previous years and even made profits instead of debt as a nation. So. this is not an american issue like people suggest, this has nothing to do with nasdaq or dow jones or anything like, this is a global bear market we are in right now because system is having trouble sustaining itself and it needs to drop a bit and create chaos in order to mix things up a bit before it goes back up, there is a limit on wealth and only so much of it can be obtained, anytime we reach the limit, world goes into chaos once again and regroups.

[stompix]

I love how OP started out "worldwide" but only mentioned american stocks.

You might want to read the whole post.

Markets in London experienced a similar downturn, <>
Chinese stock markets took the worst hit, <>
Hong Kong’s HSI Index lost 13.6% this year, its worst since 2011 when it lost 19.97% <>
Similarly, Japan’s Nikkei 225 Index lost 12.1% during 2018, its worst since the financial crisis.

Well, to honest none of them dropped as much as the cryptos have and none of them have grown as much as cryptos in 2017.
But both those losses come after years of growth, at one point this has to at least stop if not go down, nothing can grow forever (not even BTC).

Crypto is related to the stock exchange so it's not surprising that bitcoin took a real battering in 2018.

No, it's not and this year is possible the first year the trend was quite similar for a few brief months.
And 1 out of 100 doesn't make it a rule, rather an exception.

[exstasie]

If stocks market became worst in 2018 since 2008, are we heading towards another financial crisis like it happens in 2007 and 2008?

Maybe but I don't think so myself. Stocks aren't isolated but the fact that real estate is holding much stronger tells me we're not on the brink of a 2008 redux. There's really no comparison yet between 2018 and 2008. 2008 was much worse. The current correction is still much smaller than the 1987 crash as well.

People are blowing things out of proportion a bit with all the "financial crisis" talk. We can talk about that when the market has plunged another 20-30% below the recent bottom.

[el kaka22]

I love how OP started out "worldwide" but only mentioned american stocks.

You might want to read the whole post.

Do you see charts for the other countries? There was one paragraph for all of London stock market, just two-three sentence, nothing about the German and french or so any other European countries whereas there are many places like Italy that took a great hit. Plus the only other one is the Asian markets. Hence, there has been a big big emphasis on SP with a lot of thing said about and charts and so forth whereas the "worldwide" was cut short, given only a fraction of the effort to London one and a shallow Asian flyby for it.

This is definitely a global problem right now and this was focusing on more on the fact that "American stocks dropped so did other markets" instead of "all markets dropped". It has been a horrible economical year for everyone, not just USA. So USA stocks dropping is not a bigger story right now than any other country and should not be the focus.

[1Referee]

The price dropped heavily, below what most of the investors expected and a lot of people has been complaining about it.

I think that's largely due to the fact that people have crazy high expectations. If you put the bar too high (which is purely based on what happened in 2017), you are begging to have yourself go through a year with only paper losses. It's beyond insane if you think about how people were expecting the price to hit like $50,000 before the end of 2018.

I kept lowering my expectations of the market as months went by, while people here continuously were talking about prices to break through the previous high and far beyond that. Perhaps that idiotic perma bulls such as Tom Lee and Mike Novogratz contributed to that, because average joes seem to consider everyone appearing on TV frequently an expert, because why else would they be invited, right?

[stompix]

I love how OP started out "worldwide" but only mentioned american stocks.

You might want to read the whole post.

Do you see charts for the other countries? There was one paragraph for all of London stock market, just two-three sentence, nothing about the German and french or so any other European countries whereas there are many places like Italy that took a great hit. Plus the only other one is the Asian markets. Hence, there has been a big big emphasis on SP with a lot of thing said about and charts and so forth whereas the "worldwide" was cut short, given only a fraction of the effort to London one and a shallow Asian flyby for it.

This is definitely a global problem right now and this was focusing on more on the fact that "American stocks dropped so did other markets" instead of "all markets dropped". It has been a horrible economical year for everyone, not just USA. So USA stocks dropping is not a bigger story right now than any other country and should not be the focus.

Because we must face reality, and I must tell you that I'm from Europe not from the US so not taking their side.
If the US market sneezes, the rest comes down like a domino board.

And yes, on a global level when it comes to markets there is one story, the US and the rest that don't get a headline.
For example, I was reading that just before Christmas the stock market of Romania dropped 20% or something, have you heard about them? Neither would I if I hadn't clicked on a clearly click bait article. Impact? 0!

The moment when other markets will follow Dax or Cac, then more than a line would be needed, but right now they are just following the US like sheep, one line is more than enough.

....

The funny thing is that right now as I'm speaking the S&P is up 3.43% today and YTD decline is right just 2.6%