As it turned in a decline of 1.07% on Monday, the Nasdaq composite had its worst day since 7/31. In the process, the index traded down to its lowest level since it broke out on 8/18.
(click to enlarge)With Monday's sell-off in the Nasdaq, a lot of US stocks (primarily in the small cap universe) were down sharply. Looking at the individual performance of Russell 3000 companies, there were 32 stocks in the index that fell more than 7.5% Monday alone. As shown in the table, a lot of those names were stocks that had been leading the market higher since the Nasdaq broke out on 8/18. For example, the average return of these 32 stocks since 8/18 through Friday (9/12) was a gain of 7.9%.
One of the highest profile names on this list is Tesla (NASDAQ:TSLA), which dropped 9.1% for its worst day since May 8th. Interestingly,
The three big current arguments against owning stocks or other risk assets are:
We will address the question of asset bubbles and economic slowing or deflation in another article. This one is about war risk to US stocks.
Note: This article is intended only to relate specifically to the S&P 500, and collaterally to broad, market-cap weighted, large-cap US indexes. ETFs that come under this specification include: SPY, VOO and IVV for the S&P 500 specifically; and probably total market ETFs such as ITOT and VTI, IWW and VTHR; and probably various ETFs following large-cap indexes from Russell such s VONE, ONEK, VONG, VONV, IWB, IWD, and IWL; or ETFs following US large-cap indexes from Standard and Poor's such as OEF.
War has not been bad for US stocks