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July 8, 2020, 9:18 a.m. EDT

The surge from the March lows masks how volatile stock markets still are

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By Steve Goldstein, MarketWatch


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Market conditions are choppy.

Tuesday broke a remarkable run of five straight gains of at least 0.5% by the S&P 500.

How remarkable? Michael Batnick, director of research at Ritholtz Wealth Management, calculates that it is a roughly once-in-2,000-days likelihood , given that the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.12%  has gained at least 0.5% about 28% of the time, going back to 1993.

The other times this happened was 2011, 2009, 2008 and twice in 1999 — all periods of above-average volatility.

His point is that, while investors may not be viewing conditions as volatile after the recovery that has sent the S&P 500 up 41% from its March lows, markets still are choppy. “The reason for this, stating the very obvious, is that volatility feels much better on the way up then on the way down,” Batnick says.

The moral to the story is that volatile markets force investors to “learn or relearn our true tolerance for risk. And, even if you’ve invested through periods like this before, sometimes we need a reminder of what risk feels like.”

The buzz

There were violent clashes in Serbia over the reimposition of lockdown measures, while Australia’s prime minister defended the six-week lockdown measures imposed on Melbourne. The U.S. saw a spike in coronavirus deaths on Tuesday, though that could represent in part a lag in reporting after the holiday weekend.

The U.S. reportedly has considered a proposal to undermine the Hong Kong dollar’s peg to the greenback, according to a Bloomberg News report that said the idea has faced strong opposition internally. Shares of HSBC Holdings /zigman2/quotes/208272822/composite HSBC -2.04% , with 35% of its customer accounts in Hong Kong, slumped in London.

British Prime Minister Boris Johnson told German Chancellor Angela Merkel that the U.K. was willing to leave the European Union on what he called “Australian” terms, according to a U.K. government spokeswoman, which implies a harsh exit at the end of the year.

U.S. President Donald Trump hosts talks with Mexican President Andrés Manuel López Obrador to celebrate the U.S.-Mexico-Canada trade agreement.

Atlanta Federal Reserve President Raphael Bostic, who in an interview on Tuesday spoke of a stalling U.S. economy, is due to deliver a Wednesday speech. Consumer-credit data highlight a thin U.S. economics calendar.

Aluminum-products maker Alcoa /zigman2/quotes/200686102/composite AA -0.97%  provided preliminary second-quarter results that were above analyst expectations.

Nokia shares /zigman2/quotes/207421390/composite NOK -1.21%  slumped in Helsinki on concerns that Samsung may supplant the equipment maker as a supplier to Verizon Communications /zigman2/quotes/204980236/composite VZ -0.40% .

KKR /zigman2/quotes/206126495/composite KKR -1.02%  said it’s buying insurer Global Atlantic Financial Group, for about $4 billion. Allstate /zigman2/quotes/201974803/composite ALL -1.64%  is paying the same in its all-cash deal for National General Holdings /zigman2/quotes/202458366/composite NGHC -0.06%

Sign up to Barron’s Investing in Tech series, which on Wednesday features Peloton’s chief financial officer Jill Woodworth

/zigman2/quotes/210599714/realtime
US : S&P US
3,319.47
-37.54 -1.12%
Volume: 4.09B
Sept. 18, 2020 5:15p
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/zigman2/quotes/208272822/composite
US : U.S.: NYSE
$ 19.73
-0.41 -2.04%
Volume: 4.13M
Sept. 18, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$80.25 billion
Rev. per Employee
$366,224
loading...
/zigman2/quotes/200686102/composite
US : U.S.: NYSE
$ 13.32
-0.13 -0.97%
Volume: 7.73M
Sept. 18, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.48 billion
Rev. per Employee
$965,500
loading...
/zigman2/quotes/207421390/composite
US : U.S.: NYSE
$ 4.09
-0.05 -1.21%
Volume: 20.34M
Sept. 18, 2020 4:00p
P/E Ratio
33.42
Dividend Yield
1.04%
Market Cap
$23.18 billion
Rev. per Employee
$258,434
loading...
/zigman2/quotes/204980236/composite
US : U.S.: NYSE
$ 60.35
-0.24 -0.40%
Volume: 22.58M
Sept. 18, 2020 4:00p
P/E Ratio
13.05
Dividend Yield
4.16%
Market Cap
$249.73 billion
Rev. per Employee
$905,626
loading...
/zigman2/quotes/206126495/composite
US : U.S.: NYSE
$ 35.04
-0.36 -1.02%
Volume: 10.20M
Sept. 18, 2020 4:00p
P/E Ratio
129.35
Dividend Yield
1.54%
Market Cap
$19.59 billion
Rev. per Employee
$2.25M
loading...
/zigman2/quotes/201974803/composite
US : U.S.: NYSE
$ 91.28
-1.52 -1.64%
Volume: 2.55M
Sept. 18, 2020 4:00p
P/E Ratio
6.84
Dividend Yield
2.37%
Market Cap
$28.51 billion
Rev. per Employee
$856,105
loading...
/zigman2/quotes/202458366/composite
US : U.S.: Nasdaq
$ 33.95
-0.02 -0.06%
Volume: 974,360
Sept. 18, 2020 4:00p
P/E Ratio
9.51
Dividend Yield
0.59%
Market Cap
$3.85 billion
Rev. per Employee
$545,968
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