Displaying items by tag: bear market

(New York)

Imagine retiring this month. The Dow’s recent bottom means it was 18%+ off its peak. That is a really rough time to be entering the late stages of a career or early stages of retirement. One option for those worried about protecting income is a fixed index annuity. The insurance product guarantees full principal and is designed to offer upside as well. The idea is to have their yields outperform the market, but at the same time offer full downside protection.

FINSUM: Fixed index annuities are probably going to see a big rise in popularity this year given how poorly the stock market is doing. Worth consideration.

(New York)

Storied research firm Bernstein Research has a recommendation for you, and it is a brave one—buy stocks. The firm says that on a tactical buying basis, it is time for investors to re-enter the market. Bernstein acknowledges that they have no idea when the coronavirus situation will clear up, but that given the general decline in indexes and that fact that sentiment has swung negative, it only makes sense to buy because the market has become too bearish.

FINSUM: We have to give Bernstein credit here for a bold call. Most analyst teams tend to hide or vacillate, but this is a strong call.

(New York)

The market is currently in a rough patch. Even with yesterday’s big rally, the near-term prognosis for stocks could be quite bearish. That said, one product that would clearly benefit from a bear market is fixed index annuities. Because they are designed for principal protection (with limited upside), they tend to do very well during down markets, with clients showing ample demand. They are also not overly vulnerable to the Fed cutting rates, so taken altogether, they may be a perfect product for this market.

FINSUM: It seems like a good time for fixed index annuities, and we suspect clients will be showing good demand for the product given widespread anxiety.

(New York)

Stock across the developed world went into freefall today as news spread of the explosion of the coronavirus in Europe and the subsequent quarantine that has been put in place in Northern Italy. Additionally, US data shows business activity contracted for the first time in four years in February. The S&P 500 and Dow are both down about 3.4% at the time of writing.

FINSUM: The virus is now no longer contained to China, with Italy sporting 150 cases and three deaths. Chip companies, travel and tech are getting hit the hardest.

(San Francisco)

In many ways the coronavirus just became real for stock markets. Up to this point, fears about how the virus might impact the economy and stocks seemed esoteric and intangible. Then this happened: Apple warned that it would miss its quarterly revenue target because of coronavirus. It is having trouble producing phones because of unstaffed Chinese factories. Accordingly, the company announced “iPhone supply shortages will temporarily affect revenues worldwide”.

FINSUM: This is when the rubber meets the road and it becomes much easier to see how this virus could cause a global recession. The engine of the world (China) is sputtering.