Stocks have been cruisin’ for a bruisin’ over the past few weeks as bulls have shrugged off every negative data point that could be imagined, from bank account confiscation in Europe to the wholesale declines of value in emerging markets, the ruination of precious metals and the threat of thermonuclear war from a lonely, isolated, trigger-happy North Korean strongman.
It’s almost as if U.S. big-cap stocks were acting like some mutant superheroes that actually feasted on trouble, and grew stronger from them.
But you know there are no such things as superheroes, and in our highly interconnected, hyper-globalized economy it is very difficult for one area of the Earth’s crust to cut itself off from the rest. So it was only a matter of time before doubts began to creep in about bulls’ financial and emotional armor.
When you look around for causes of yesterday’s decline, you won’t find much. There rarely is a really good reason for such things. Sure, some Chinese economic data was weak. And so was a third-tier report on U.S. homebuilders’ confidence, whatever that is.
The reality is that a smokin’ smackdown like yesterday’s 2.3% plotz is a result of the accumulation of many different causes that all of a sudden rip the seams of investors’ confidence and lead to wholesale selling.
Novartis (NYSE:NVS) provided some welcome relief to investors yesterday on a tough day for global markets. It’s a big Swiss drug maker with therapies ranging from neurological and ophthalmologic maladies to cardiovascular and respiratory ailments. This has been one of the best stocks to hold all year, so try to get in on any panic dips. Hold for a $75 target.
InvestorPlace advisor Jon Markman operates the investment firm Markman Capital Insight. He also writes a daily swing trading newsletter, Trader’s Advantage which aims to capture profits of 15% to 40% and often as much at 100% to 200% in less than 90 days.
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