Stock Markets Fall Hard

The US stock market trading was halted early this morning, as markets plunged at least 7% from the opening price.  This rare event was triggered by oil prices crashing lower, which added to the ongoing panic the market is already experiencing.  In response, the yield on the 10-Year Treasury Note fell beneath the 0.43% level, which is by far the lowest level this has ever registered.  The crazy thing is there are very few experts who predicted bond prices falling this low.  As a result, many positioned their investment portfolios to avoid owning 10-Year Notes.  Unfortunately for them, they have missed out on one of the greatest rallies this market has ever seen.

The news of the week will be Consumer Pricing Index (CPI) report.  Given the current market environment, we can confidently predict that consumer inflation will be low.  However, the February report will likely show a higher rate of inflation, then the month of March will show.  We can also expect to see Consumer Confidence, GDP and Job reports show much lower levels.  Given the amount of damage now done, it’s hard to say just how bad things will get.  We continue to see a recession on the horizon.

If you choose to float, do so carefully.  I believe now is a great opportunity.  Be careful not to miss out.