r/stocks • u/ilikelucy1 • May 04 '21
Why is the market down so much today? Industry Question
Holy shit. The nsadaq is down a whole 2.5% right now. SP500 is almost 1.5 and the Dow is down a little under 1%. Whats going on? I know the market is overvalued right now, but I didn’t think it would drop this fast or this soon. Is there another reason so many people sold today?
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u/Dumpster_slut69 May 06 '21
People think tech has gone up too much it must come down so they sell or tAKe PrOFIts
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May 05 '21
I’ve said it before this market is a POS. Overreacting to everything. Wall Street is a bunch of paper handed biatches
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u/Laserpantts May 05 '21
Margin calls are coming, naughty hedgefunds are liquidating stocks bc they need more collateral due to gamestop
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u/spiner00 May 05 '21
The GME saga is long over, it will continue to bleed back to reason as retail investors lose interest and large funds on the long side of it decide it’s not worth selling the hype anymore
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u/Laserpantts May 05 '21
Do you live under a rock? GameStop is going to be the next Amazon. Even without the squeeze nobody is going to sell the stock. GameStop is a great long term investment...if you don’t agree just look at the changes the company has made in the past 3months. They paid off all their debt, they raised an additional 900 million in cash, they just procured a 700,000 square foot fulfillment center, and they are expanding like a giant into the huge realm of gaming and e-commerce.
We believe in Ryan Cohen, we believe in the company, and oh yeah, we like the stock.
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u/spiner00 May 06 '21
I just discovered r/superstonk and it’s more an echo chamber for greedy gambling addicts in denial than it is an actual fundamental and contextual analysis forum. Best of luck with beating the people who literally control the market.
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u/Delicious_Common_834 May 05 '21
Tbh, im getting kinda used to all red and loss in cash for last months. But.... when it go's up again in some weeks/months the joy will be overwhelming. Can't wait =).
Beer, snacks, coke and screwing an tranny in the hood of my shitty 80's corvette to celebrate
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u/Thediamondhandedlad May 05 '21
If you’ve been following the ongoing #GME shenanigans;According to The “everything short DD” written by Atobitt the whole market is about to collapse like something we haven’t seen in a long time. Too many funds and financial institutions over leveraged themselves in short positions during the pandemic and the repercussions will be enormous. If he’s right we’re talking global economic collapse. People have been talking about the impending collapse for weeks in the superstonk and GME subreddits. This could be the beginning of a mass sell off so institutions can cover their shorts.
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u/fortifier22 May 05 '21
Because Michael Burry and Warren Buffett were right.
The same exact crap that caused the 2008 Housing Market Crash is happening now, but this time also with Treasury Bonds (I.e. the value of the entire US Economy).
What happened, in short, was that banks would keep lending out bonds to each other in a circular fashion as collateral for instant cash-on-hand which they would then use to make huge plays. With this they would also use the fractional reserve system to essentially create synthetic bonds out of thin air and use them as collateral even though they were not real.
Some even conspired to use this instant money to tank other companies by shorting them, and then buy back the treasury bonds later after they became cheaper by shorting the economy they were tied to.
But now as other investments are failing miserably (Archegos blowing up, GME rocketing despite ridiculous short interest, etc.), suddenly all the big guys need money to pay off their positions...
But the collateral they gave out was actually worthless.
Now under the new SEC head, Gary Bensler, they’re now enforcing new rules with the DTCC like there’s no tomorrow to not only stop synthetic shares/bonds, but also force everyone to cough up their synthetic shares/bonds and replace them with legitimate collateral instead.
And now, huge banks and financial players are being forced to liquidate their assets to get the necessary liquidity they need to cover their asses.
Why else would banks and hedge funds report record profits then hand out billions worth of BBB bonds?
Why are all bank CEOs being called to testify this month to Congress for “unspecified reasons”?
Why would the MSM lie last Wednesday that the DOW JONES tanked because of Biden’s tax plans when the Biden Administration actually has said nothing about the tax plans since 2019?
If you want more info, check out this post backed by financial experts such as Alexis Goldstein and Dr. Trimbath here.
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u/Steadfast_Truth May 05 '21
What kind of question is this? It's because of GME and the liquidity needed to cover shorting positions.
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u/Lightskinape May 05 '21
We warned you guys about what was going to happen. Mass hedge fund and bank liquidations ongoing right not to make up collateral for shorting GameStop. It’s only gonna get worse for the market from here. MAJOR Fire sales on the way
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u/TheLakeShowBaby May 05 '21
play stupid, stay stupid, stay broke. People still want to play stupid when it comes to GME.
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u/Lightskinape May 06 '21
I don’t know what it’s going to take for others to believe in it. They just shrug off GameStop like some type of conspiracy. Even tho it’s VERY real
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u/TheLakeShowBaby May 06 '21
Bc people are just ignorant that’s why, people talk about “fundamentals” in the stock market. There ain’t no “fundamentals” in that shit when the whole thing is manipulated.
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u/Lightskinape May 06 '21
Facts brother. Hopefully people get on board before it’s too late. Fuck the 1% that controls the market and whole financial system
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u/TheLakeShowBaby May 06 '21
When you start connecting the dots, the 1% controls the whole world. From politics to sports teams.
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u/Lightskinape May 06 '21
And CEOs too. Big money has always controlled everything. One example is Stephen Cohen owning the Mets. One of the biggest doucheags in the market now along with Ken
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u/AdamF778899 May 05 '21
Because of the new SEC rule requiring shorters to have 20% more cash on hand. Everyone who shorted the “meme stocks”, and GME specifically, had to sell long positions to be solvent. It won’t be enough and some of them are about to get margin called. These are the first raindrops of the hurricane, buckle up.
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May 05 '21
Janet Yellen said they would raise interest rates. Freaked all the hedge funds out who have been trading on margin. Any higher interest rates and they get margin called.
Archegos went bankrupt in a bull market.... That's a taste of what's to come.
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u/PhillipIInd May 05 '21
tbh there are multiple post on gme related subreddits that just go deep into DTCC/FICC/SEC etc type regulations, I would crosspost it here but Im not able to.
Your answers lie there.
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u/JimmyJohns454 May 05 '21
Hedge funds trying to get that sweet sweet liquidity for their short positions so they don’t get margin called
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u/IcarusWright May 05 '21
Yellen suggesting that we might have to raise interest rates to mitigate inflation, as well as a recent meeting with W Buffet suggesting that we are fast approaching hyper inflation as evidenced by current prices of commodities, and housing cost due to funds spending free Federal reserve dollars on REITs.
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u/MahTreesTA May 05 '21
It’s almost like a bunch of big fucking hedge funds and banks are exiting positions to raise capital to try to avoid margin calls due to overexposure in short positions on a certain security by increasing their liquidity on paper.
But I can’t for the life of me think of what it might be.
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u/Nathan_Defense May 05 '21
There is no news. We've been on a bullish run for weeks now, and people are just taking their profits. Sometimes, the market moves all on its own. It's just part of the deal
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u/J3RQ May 05 '21
It was a very normal daily change. Markets can't just go up everyday, you do know that?
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u/Sasuke082594 May 05 '21
How can a sub dedicated to stocks be so oblivious to what is coming?
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u/codymiller_cartoon May 05 '21
even if a crash is imminent , there is no reason to panic if you're in it for the long haul
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u/Sasuke082594 May 05 '21
Exactly but people are going to be people and think it’s the end of the world. You BUY when the market is red, not SELL.
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u/lilivnv May 05 '21
All I know is I just bought a Samsung and returned that shit to use my old (fixed) iPhone. I’m sorry but iOS is just so much cleaner, simpler, smoother. If I had money for calls I’d buy some
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u/Justbeenlucky May 05 '21
Hedge funds are trying to cover their short positions and are running out of time. Whole market is about to crash in less than a month
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May 05 '21 edited Jul 11 '21
[deleted]
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u/Justbeenlucky May 05 '21
You can believe that if you want but it doesn’t hurt to look, the post I linked was posted 14 days ago and it points out how the new rule being implemented would go into affect yesterday and you saw what happened today and it talks about what could possibly happen in the future. Yes you have to take some of this stuff you read with a grain of salt but that thread has some of the most thorough dd I’ve ever read and most have linked data and thousands of others peer reviewing it to try to make it as most accurate as possible
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May 05 '21 edited Jul 11 '21
[deleted]
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u/Justbeenlucky May 05 '21
Anytime! thanks for not shutting the possibility down right away. Most people once I mention GME would just laugh and say I’m an idiot while having no evidence or argument leading to that conclusion
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u/Justbeenlucky May 05 '21
It’s somewhat to do about GameStop so if you don’t want to fall down a rabbit hole I would just ignore the comment but here is one piece of DD I would read if you’re curious and if it grabs your attention there is a lot of good stuff on the thread that might give you a whole new perspective on the stock market. Good luck https://www.reddit.com/r/Superstonk/comments/mur8bz/srdtc2021004_the_dtcc_and_jp_morgan_theyre/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
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u/effofexisy May 05 '21
US president Biden is enacting a bill that would increase long term capital gains tax from 20 to 39ish percent. This is probably causing a big sell off for people so they aren't affected before this comes into effect.
I'm Canadian so I don't fully know the US tax system but that is my best guess to answer your question.
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u/Sasuke082594 May 05 '21
The amount of misinformation and idiocy is alarming. It’s pre 2008 all over again. Hopefully this is the last time. Glad I was born in the right time to capitalize on $GME Mother Of All Short Squeezes.
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u/hereforthebumble May 05 '21
Lot of wrong answers here. The market got spooked by the comments Janet Yellen made. She went against everything Powell has said for weeks about keeping interest rates low while we enter recovery.
The market is also heavily short and in the process of a rotation. Money is leaving tech, consumer dis., industrials and the top inflow from hedge funds is in to healthcare and real estate. Materials are also where to be w/ inflation on the rise temporarily.
XBI is also 100% short, so biotech is down. Retail is 100% short on the XRT so that's a struggle for that sector. Lot of bullshit happening in the market today. Feels like a retail punishment.
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u/1percentRolexWinner May 05 '21
people moving to crpyto, why risk money in a rigged stock market when you can easily double your money in a month with crpyto.
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u/Sasuke082594 May 05 '21
You realize that shit is being pumped and dumped to raise capital to inevitably pay for $GME synthetic shares and to close original short positions?
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u/TheLakeShowBaby May 05 '21
exactly whats going on. shits gonna be dumped after they pumped it enough
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u/somecrazybroad May 05 '21
I have lost so much money today. Wtf.
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May 05 '21
My stupid brain was thinking something similar to the Archegos blowup or someone dealing with losses from Archegos...
But nonetheless, BUYING OPPORTUNITY!!!
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u/STODracula May 05 '21
Janet Yellen couldn't give an interview without mentioning interest rate hikes and took the whole market for a ride down.
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u/TheCureprank May 05 '21
Stock market is no different than playing Texas Holdem.....you have some good runs and some bad runs. It’s a gamblers paradise
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May 05 '21
You guys are missing a lot of market research happening in the GME corners of reddit
There are def explanations for this behavior
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u/Sasuke082594 May 05 '21
These people refuse to believe and read any actual information. These people get their information from the very people who allowed and even propelled these events.
We all know what happened last time they didn’t listen. Hope y’all are ready for 2008 again.
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u/CinnamonPostGrunge May 05 '21
The reason seems to be because of the talks of raising interest rates again. most non free cash flow companies that benefit from cheap debt are being sold off because high interest is going to tamper their growth.
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u/Your_friend_Satan May 05 '21
Sometimes they go down on no news and for no reason. Yellen did mention they may need to raise rates, though I believe that announcement came after the market was already down.
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May 05 '21
Janet Yellen saying interest rates have to go up to prevent an overheated economy. Tech companies do poorly in an environment where interest rates go up. This is why nasdaq took a shit today.
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u/KernAlan May 05 '21
Janet Yellen made some comments that we may need to raise rates sooner than expected.
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u/Nouseriously May 05 '21
SPY was down 0.62%, that ain't exactly the apocalypse. Diversify.
A lot of tech stocks went down after having gone up over the last week. Welcome to the Kangaroo market. A couple stayed down after dropping from earnings
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u/95Daphne May 05 '21
This is an old post, at the time that this was posted, it very much looked completely ugly. Like, I had a bad feeling about today, but even though we didn't end anywhere near session lows and had one major average actually end positive, to be honest, today topped that Tuesday from two weeks ago.
Many, myself included, may need to just wait until the dust settles before making any takes, but if you asked, no, I don't consider what the Nasdaq did today to be in the realm of normal, while it didn't close there, I believe it went to -3% or darn near there and that's abnormal here, but then again, the last time it scared me this much was March 18th and that was followed up with...nothing.
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u/Nouseriously May 05 '21
Unfortunately, the market isn't it on easy mode any more. Wish it was.
People get spooked & you'll see irrational selloffs for no good reason. Companies will crush earnings & still fall.
Hell, Musk could do something stupid on SNL and singlehandedly crash all the EV stocks Monday morning.
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u/_sillycibin_ May 05 '21
Crsr and peri killed it for earnings and both dropped. Janet yellen blabbered something about raising interest rates and made it seem like it's going to happen a whole lot sooner than people were thinking. Got it in people's head that this year end of this year was a possibility. A lot of people are banking on going through even 2022 with no rate hikes. But throw an interest rate hike on at the end of this year with possible capital gains tax hike. In a frothy tippy top market that's just looking for excuses to sell off...
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u/CorneredSponge May 05 '21
Interest rates news + continued restructuring due to the capital gains news + lots of earnings that were priced in + inflation fears stoked by Buffett's comments + lots of overall uncertainty would be my bet.
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u/P-H-O-S-I-T-A May 05 '21
This time of year the market usually goes back to suck. Summer ain’t peak season for suits (cough, Hamptons).
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u/Romytens May 05 '21
New leverage collateral requirements in effect today. Big funds dumping positions to free up liquidity and post collateral.
Big things are about to happen
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u/SecularZucchini May 05 '21
Likely another tech sell off and the comments regarding interest rates from Janet Yellen. If you're in it for the long haul I wouldn't worry about it, if anything you should load up on shares if you have the cash.
The market can't go green every day, otherwise no one would have bank accounts.
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u/Fair_Fly8928 May 05 '21
You guys thought about the correlation the GME/AMC situation has on the market?
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u/Spenson89 May 05 '21
The SP500 is up 54% over the last 12 months and then we get posts like this. If that doesn’t scream bubble idk what does
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u/careful_guy May 05 '21
I'm just sick of this downturn. One step forward, two steps back.
Last year 1000s of people were dying every day but the stock market kept going up. This year, millions are being vaccinated, things are looking to bounce back, yet the stocks are down. WTF.
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u/Sasuke082594 May 05 '21
The truth is in plain sight. Do some digging. The “news” doesn’t count. P.S. they’re in on the ponzi scheme 13 years in the making.
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u/Lochtide17 May 05 '21
The big hedge funds are shorting the entire market for liquidity, nothing more I can guarantee you
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u/sK0pey May 05 '21
The treasury was quoted as saying she expects interest rates to rise soon or something to that effect so investors would be spooked. Good time to get in on some stocks.
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u/TianObia May 05 '21
Bad earnings weak and decent market correction, it’s heavily overvalued but the bull market continues
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May 05 '21
heres some things you should take to heart.
Sometimes the market is up on good news while other times its down on the exact same news.
sometimes its up on no good news at all, while other times its down on no good news at all.
Sometimes the market is up on bad news, while other times its down on bad news.
So, because you cannot accurately/consistently guess what will happen, the best course of action is to plan your actions ahead of time and prepare to be wrong. This is risk management.
However, the one significant stat to come about is that te market is generally up more timea than down.
imo its likely due to population growth and increased participation.
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u/saryiahan May 04 '21
Inflation and talk of higher rates. I switched into commodity stocks and been rocking Green Day’s for a while now. Today my portfolio was up over 12% by close
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u/TheGreatOni1200 May 04 '21
I've bought $1500 into $APPL so far and it decided to go down today. I'm pretty pissed. It was my big performer before this shit.
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u/Chaydanger5 May 04 '21
You know it’s a weird day when DOGE is holding together your portfolio...
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u/Sasuke082594 May 05 '21
No one cares about that shitcoin other than people oblivious to what’s going on and what’s to come.
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u/Chaydanger5 May 05 '21 edited May 05 '21
Lmfao not saying im panic selling reliable investments or relying on DOGE. No need to spread hate based on how someone spends their spare funds buddy
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u/Sasuke082594 May 05 '21
I was following doge when it was 10¢ and I couldn’t buy it anywhere lol and I was not going to open up a Robinhood account to buy some. That’s worse than going to the casino.
I have a small probability of making money at the casino
I have no probability of making money in Robinhood
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u/xJuSTxBLaZex May 04 '21
I sold a few things myself and threw some more into doge so I'm guessing lots of people did. I didn't throw enough to hurt, but definitely enough in case it actually does hit $1 plus.
I also bought some calls today and a a few are already up. A lot of option premiums were down 40% or more today on some very good companies. Wish I had more to throw at calls, but I'll take what I can get.
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u/ultimateChampions68 May 04 '21
The market is down because there is massive SI on $GME and other meme stocks and changes in the SEC have come into effect, shorters are selling off to cover the eventual meltdown as more Archepegos margin calls are likely imminent
Read some of the DD on r/superstonk and r/GME
Discount the lingo and look at the details.
I am not a financial advisor, this is not financial advice. Do your own research
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u/Sasuke082594 May 05 '21
They turn a blind eye and then will try to blame us LOL. Humanity certainly is very naive.
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u/Silveras918 May 05 '21
Why is this dpwnvoted? You guys need to learn to read and do your due diligence.
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u/Lilygolfer1111 May 04 '21
Hey. If anyone has shorted and needs anything in particular to go down, let me know. If I buy, it goes down....! I can help you out.
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u/lucky5150 May 04 '21
Indexes are at an all time high. + "sell in May go away". + "everything is over valued" + "F it ill just Cash out my target date 401k and yolo it all on DOGE" + high leverage. + this market is very irrational. + Toda really wasn't that bad of a drop all things considered
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u/sleeksleep May 04 '21
Also, J Yell made comments about raising interest rates. J Yell and J Pow got some things to figure out.
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u/ItalicisedScreaming May 04 '21
I don't understand how companies will give good earning, constant good news for future earnings, clear value in stock, but it dips 5% premarket and barely makes it back up by the end.
I'm starting to think the only way people will legit buy stocks is if the company files bankruptcy.
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May 04 '21
Yelled said they might raise int rates if Biden moves forward with stimulus package to prevent overheating
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u/Minute-THX1138 May 04 '21
Lost over 100k today. Set up my Tech heavy portfolio like the George Forman grill. Set it and forget it. What is a little correction anyway.
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u/jfosdick87 May 04 '21
I would just like to point out that Nokia is still higher then it has been in months. They just want to watch the world burn.
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u/Swandiving4canabis May 04 '21
Look at GME line charts vs each stock almost identical movements angling some upwards during some downward. Each is identical to GME being wash sold aka ladder attacked.
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u/TheCautiousInvestor May 04 '21
The reasons markets took a hit today was due to Treasury Secretary Janet Yellen raising the possibility on Tuesday she is neither predicting nor recommending that the Federal Reserve raise interest rates as a result of President Biden’s spending plans, walking back her comments earlier in the day that rates might need to rise to keep the economy from overheating. The markets reacted negatively to the news the interests could rise meaning investing in equities becomes less attractive.
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u/alamedastrip May 04 '21
The sheeple all believe that you sell in may for no good fundamental reason.
Could you imagine being part owner in a business like McDonald's and you sell your stake in may just because.
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u/felunk May 04 '21 edited May 04 '21
It’s because Janet Yellen spoke today and said at some point interest rates would have to go up to stave off inflation....so yeah when the fed actually says this(doesn’t even have to do it) , expect at least a 10% pull back, if they do it, expect another 10%...but more than likely after seeing the market “collapse” then they’ll say ‘eh maybe later’ and the market will shoot back up...it’s all a big joke, people are looking for any reason to take profits but they’ll all get back in with a good enough pull back as holding cash is losing money these days...
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u/Different_Ad_1769 Nov 26 '21
So many libs here that wont say it so I will. Why...BIDEN and his loony policies. Same reason for inflation. You voted for him. Great job.