Investors Dread Friday 13th
Today is unlucky Friday the thirteenth. What could possibly go wrong?
This week has followed a textbook horror movie plot. It started with a fortified Russian power flooding the globe with Brent Crude, trying to upend Western shale and grab market share in the energy market. Stocks tumbled so far that a circuit breaker was called upon to halt to the madness!
By Tuesday, Putin was old news. The spread of coronavirus was accelerating, and while Italy had borne the brunt of it, it was now all over Europe. A “quiet” Tuesday was followed by a 5% tumble Wednesday, but the worst was yet to come. Underwhelming central bank stimulus raised the stakes for government stimulus, and markets couldn’t handle it. The S&P 500 fell 9.51% yesterday (not a typo!).
World powers insist this isn’t a financial crisis, but the Federal Reserve is firing a 1.5-trillion-dollar bazooka of printed money at it just in case. Eddy Elfenbein, who’s beaten the market since 2006 as a revered portfolio manager, compared the Fed’s move to “pouring gas into a car that doesn’t have wheels!”
The worst Friday 13th for investors historically saw the Dow Jones plummet 6.1%. That was in 1989, bookmarked as a mini-crash brought on by an overly risky $6.75 billion buyout deal for United Airlines. Were such headline to break today, markets would barely flinch.
Funnily enough, though, most “unlucky Fridays” have traditionally been reasonably lucky for investors. A tiny market gain has been averaged over the last 157 of these days, the best uptick being 3.3%.
Indeed, many investors are more worried about the Ides of March, Sunday 15th being the Romans’ calendar deadline for setting debts. It’s also the day, in 44 BC, that Julius Caeser was assassinated. We’ll find out more of our modern economic fatalities today. Brace!