LIVE MARKETS-The speed of the equity drop says correction, not bear market

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THE SPEED OF THE EQUITY DROP SAYS CORRECTION, NOT BEAR MARKET

The quick declines in stock markets indicate that equities are in a “textbook correction,” and not a bear market, and that may offer a second buying opportunity for investors who missed the initial post-election surge, according to John Creekmur, chief investment officer at Creekmur Wealth Advisors.

“Corrections tend to be very short in duration and fast moving, while bear markets take longer to play out and their moves are not as noticeable over the very short term,” Creekmur said in a note.

Stocks have now erased all gains made since the November 2024 election, which were driven by hopes of deregulation and tax reform. And “the S&P 500 at current levels is an attractive opportunity for investors who missed out on the post-election gain, especially since the factors that fueled the post-election rally are still in play today, even though there is elevated uncertainty from tariffs,” he added.

Bespoke Investment Group highlights that the recent selloff was led by stocks that performed best after the 2024 Election. The 100 stocks that did the best from Election Day 2024 through 2/19 are now down 19.7% on average since then, while the worst 100 are only down 1.4%.

Thus “what we've seen over the last three weeks is simply a wholesale reversal of the original move following Trump's victory,” Bespoke said.

Creekmur notes that technology stocks in particular look attractive now, noting that “during a market correction, it's important to focus on sectors that had strong fundamentals even before the correction, and that includes technology, which is an area of the market that is still generating incredibly strong earnings.”

(Karen Brettell)

FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:

BEFORE AND AFTER: JOLTS VS NFIB - CLICK HERE

ARE EUROPE'S 'DEFENSE SEVEN' THE NEW 'MAGNIFICENT SEVEN'? - CLICK HERE

U.S. STOCKS MIXED, BUT TRYING TO HOLD THE LINE - CLICK HERE

NASDAQ COMPOSITE AND THE SEARCH FOR A TRADABLE LOW - CLICK HERE

"THE WORLD HAS TOO MUCH AMERICA IN ITS PORTFOLIO" - KAIROS - CLICK HERE

RECESSION? WHAT RECESSION? - CLICK HERE

EUROPE MOSTLY HIGHER, DEFENCE LEADS, TRAVEL LAGS - CLICK HERE

EUROPE BEFORE THE BELL: STOCKS SEEN OPENING SLIGHTLY HIGHER - CLICK HERE

TARIFFS TOPPLE STOCKS, NO SIGN OF 'TRUMP PUT' - CLICK HERE