U.S. equities are having trouble holding a lead lately. The prevailing
pattern has been a hopeful jump at the start of trading that quickly
reverses course as nervous investors sell into the brief display of
strength. Through Tuesday, the Standard & Poor’s 500 was down about 8%
for 2016, making it the worst start to a year ever, and on Wednesday
markets opened in the red.
The extreme pessimism in global equity markets so far in 2016 has caught
many investors by surprise, and that has contributed to the day-to-day
volatility that we’re seeing. We at USAA understand that the market’s
erratic behavior may have members worried about the impact on their
family’s finances. We can assure members that we take your concerns
seriously and that we are here to help you get through this rough patch.
Good luck trying to find a logical pattern in global equity market
behavior so far in 2016. On the first trading day of the year, China was
down, and that was blamed for European and U.S. stocks being down. Since
then, we’ve also seen China up and both Europe and the Standard & Poor’s
500 down, and China and Europe down and the S&P up. And even when the
S&P is up, it tends to lack conviction.