Bear Market Rally Shares Characteristics With 1929 and 1932
The recent bear market rally shares characteristics with the rallies of 1929 and 1932. Analysts are starting to worry that what might follow could be equally devastating. From WSJ…
Rarely has the stock market seen a six-month rally like the one it just turned in. The Dow Jones Industrial Average’s 46% surge was one of just six of that magnitude in the last 100 years. And that is exactly what worries many analysts.
Computer-driven, high-frequency trading is dominating volume in the current market rally, says Rishi K. Narang, author of “Inside the Black Box,” a new book on quantitative trading. David Weidner reports.
All previous rallies of this magnitude took place in the 1930s and the 1970s, according to Ned Davis Research. Those were periods of turbulence for both the economy and the markets, and none of the gains was sustained.
Many analysts believe that stocks are again in such a turbulent period, and that this rally could lead to another slump. Stocks did enjoy a rally of 40% in 1982, at the start of a long-running period of stock-market prosperity. That rally wasn’t of the same magnitude of the others, however. It came as economic troubles, notably inflation, were finally being squeezed out of the economy.
