As has repeatedly happened in U.S. stocks, a few days of losses just undid weeks and months of progress, depositing the S&P 500 at an all-too-familiar level. Frustrated traders were left to lament that it has taken the better part of two years for the index to advance all of 15 points.“I’m looking at this thing and my god, it’s like a Tour de France kind of bike ride,” Marvin Loh, global macro strategist at State Street, said by phone.
The president doesn’t see it that way. In another torrent of tweets Wednesday morning, he said Democrats’ impeachment inquiry is the reason stocks are falling. A day earlier, he blamed Fed Chairman Jerome Powell after equities got rocked by a weak factory report. As things stand now, it’s been 614 days since the S&P 500 surged to a high of 2,872 in January 2018. In that period, the benchmark has hit 18 fresh records, suffered through a correction, a near 20% loss, and two more declines of 6% this year. After Wednesday capped the first back-to-back declines of 1% this year, the index is roughly where it stood after Trump’s tax overhaul sent stocks soaring.
But while equity markets have stood still, bond yields have plunged. U.S. 10-year Treasury yields stand more than 100 basis points lower than where they were when the S&P 500 hit a record in January 2018. That’s pushed equity investors into so-called bond proxies, with utilities and real estate stocks each up more than 20% in the same 21-month period that the S&P 500 has gone nowhere.