Has The 2019 Stock Market Crash Started?
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Over the past 3 weeks, we have seen many stocks fall dramatically. I am talking 10%-20%-30% downward moves for so many stocks in such a short period of time. Now we can see some trend emerging from this where some sectors of the stock market are getting hurt very bad.
Some other sectors are not being hurt so much, so we have a couple of questions that emerge. 1. Has the 2019 stock market crash started? 2. Where has money been rotating while so many stocks have been destroyed the past few weeks? 3. Will the stock market recover anytime soon or will the stock market weaken further short term?
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Well, guys, over the past three or four weeks, the stock market has weakened quite considerably, but it is so much weaker than the surface and is so much weaker than just looking at the Dow 30. The s&p 500. I’m going to show you a whole host of stocks today that are down 20 to 30%.
Literally in the past three or four weeks, we were talking about some of these stocks have had absolutely massive moves in such a short amount of time. Okay. And I’m also going to share with you where a ton of money is flooding right now there are two places where a lot of money is flooding right now we’re talking about both those two places. Okay.
So first off here, this all started basically, at the beginning of May, just a few days into May, Trump announced the tariffs were going to go up. And basically the trade war between the US and China got a lot more serious overnight. And it wasn’t that it just got a lot more serious overnight.
It was the fact that everybody have what is it like under the understanding that oh, this was going to get a lot better. So literally in a snap of fingers that went from Oh, a trade deal is about to happen, something goods about to happen to own? No, the trade deals Not going to happen and things have just gotten massively worse. Okay. And this has infected the market in a huge, huge way over the past few weeks.
Okay. Now, like I said, if you look on the surface, you can definitely see some weakness in the markets in general, but it’s a lot worse than it really is. Okay. So if you look at the Dow Jones, Dow Jones is down about 1500 points over the past month or so since, you know, Trump sent out those tweets, the s&p 500 down about 175 points, roughly.
So it’s definitely made a move down. But it’s nothing crazy, right? The NASDAQ’s down about 600 points since that whole situation came out. Those are definitely some pretty decent sized moves in the last three or four weeks. Like that doesn’t just always happen. But it’s nothing crazy.
If you’re just looking at the markets in general, if you’re just looking at the Dow 30, the s&p 500, the NASDAQ, it’s not truly telling the full story. Let’s start going through a whole host of big companies. A lot of these are massive companies that have been hit, you know, anywhere from 10% 20% some of these stocks are approaching a 30% downward move in literally the past three weeks.
Okay. Let’s look at one month charts for some of the stocks Qualcomm, one of the biggest semiconductor companies in the entire world, especially when it comes to the mobile game. This stock just you know, three or four weeks ago was a stock that was in the 80s. Okay, it was like an $85 stock.
It’s only down to $66. Now, okay, Intel over the past few weeks has gone from a stock that was you know, 51 $52 to about a $44 stock in literally just the past few weeks. Apple Corporation has gone from two it was you know, before those tweets were sent out, basically this apple stock was approaching about $210.
And it looked like Apple stock might be trying to go for new record highs. Okay. And now Apple stock just a few weeks later is $178 a share. So shares are basically gone from before the tweet was sent out and Tesla was around $240 to now it’s $188 you’re seeing it’s a lot of different stocks and a lot of different sectors, Sky work solutions.
This stock was you know, 88 tomonaga was approaching $90 a share and now $68 Okay, these are massive, massive moves guys 88 to 66 and literally just a few weeks time Okay, that’s insane. Broadcom, okay Broadcom, you know before those tweets were sent out, it was a 310 $320 stock is 256.
Now, Nvidia Nvidia has gone from you know $179 roughly $180 a share to 139 is lost about $40 per share in literally the just the past few weeks micron that one of the biggest memory chip plays in all of the world right micron has gone from 40 plus dollars 41 $42 a share to 33 bucks a share just in the past few weeks.
There was logic This is a company I own Okay, there was one of the biggest players in audio chips for smartphones out there. Cirrus Logic stock has gotten absolutely destroyed over the past few weeks from 48 plus dollars a share to $38 a share it’s lost over $10 per share in literally just the past.
Three or four weeks guys these are unbelievable moves in such a short amount of time and it’s not like it’s just one stock or just one industry there are certain industries that are getting hit harder than others one being semiconductors, but it’s a lot of the stocks Okay, it’s a lot from a lot of different sectors.
Okay, the Chinese stocks you look at Alibaba for this trade war started to get worse right Alibaba was was looking great. Okay, Alibaba was 180 $590 a share. It’s down to $151 a share today, okay. By Duke Corporation was 160 $161 a share? It’s $111 a share of stock is off 50 plus dollars per share.
Literally just in the past few weeks Tencent holdings was about $50 a share. It’s $41 a share now Weibo Corporation was 65 $68 a share it’s down to $42 a share Okay, the Chinese stocks have gotten absolutely obliterated. So we’ve seen you know, a company like Apple get hurt.
We’ve seen companies like Tesla get hurt. We’ve seen anything semiconductor related get hurt very bad. We’ve seen anything China related get hurt very bad. It’s hard to find that many stocks that have performed well, but we’ll go through that in just a moment. Okay.
But needless to say, for a lot of stocks out there, it’s way worse than what it looks on the market, you’re looking at the market, it’s down, maybe 5%, or 6%, or something like that over the past three weeks, which is still a big move three or four weeks.
Still a big move, but it’s not like crazy, you look at a lot of these stocks down, we just went through, like almost every stock I just showed you is down between 10% and 30% in a three or four week span, guys. Okay, so next question we got to think about is where has the money gone?
Where has the money gone is always a good thing to kind of think about because if there’s a lot of sellers in the market, there’s a lot of selling pressure on stocks, what ends up happening, stocks go down, right? And there’s a lot of selling pressure on a lot of these stocks.
And some of those companies we just went through are really big companies, okay, and companies that have 10s of billions of dollars in market cap or hundreds of billions of dollars of market cap so to get those type of stocks to move down that much that Fast Money has to be flooding out of those stocks and into somewhere else.
Okay, so where’s the money it’s going into two places Okay. One is cash high net worth portfolios have well over 30% liquid right now. Okay, so keep this in mind liquid meaning basically cash money that can be you know, just like on the sideline like that’s basically what it means.
It could be mean like money and checking accounts, savings accounts, cash, anything where you can get your money like in a second and it’s not tied up to any big fluctuations that means liquid money and so we see a lot of folks saying we just want to be in cash right now. We just want to be sitting in cash and wait this one out.
Okay, you know, like 32% a little high I mean, me personally, I’m usually if you guys know me, I’m between 10 and 30% cash always 10% is what I get it down to when I’m super super bullish. And there’s like a ton of great deals I feel in the market Okay, like for instance December.
I got all the way down to 10% cash because I was plowing so much money into so many stocks in the month of December however you fast forward you look at like April you look in March, I got all the way up to about 30% cash because there weren’t as many good deals Okay, now I’m starting to deploy a lot more money back into stocks now so.
I’m a believer in 10 to 30% cash right now that’s not the only place where money is flooding right now it’s not like people are just selling off stocks or selling things in general to go to cash and noon really we’re talking about the high net worth individuals people that $10 million plus networks there’s also certain segments in the stock market where it is so obvious.
Money is going toward right now and despite the markets moving down despite a ton of those stock getting hit extremely hard. I’m going to show you a bunch of stocks right now that are up okay, not down but are off over the past three or four weeks.
Okay, let’s start going through these the Coca Cola Corporation ticker symbol kayo who doesn’t know the Coca Cola Corporation Okay, this one’s at 49 plus dollars a share it’s technically higher than it was a month ago. Okay, and by the way, I’m gonna explain you guys exactly why money is flooding in all these particular stocks here in just a moment.
Okay. Pfizer Corporation Pfizer corporation is up. So despite the markets being weakened, despite a ton of stocks, getting absolutely hammered, when the biggest pharmaceutical companies in the entire world is up over the same amount of time. Okay.
Merck, nother massive pharmaceutical company is up over the past month, Eli Lilly, nother massive pharmaceutical company is up over the past month. Okay. PepsiCo. Same exact situation. Okay. Some of the stocks are massive companies, such big ones, okay. McDonald’s, McDonald’s, look at that McDonald’s chart.
It’s the same price it was a month ago, despite the markets having weakened considerably, okay, Walmart Corporation, literally the same price, or actually maybe a little bit higher than it was a month ago. So basically, what we have been seeing over the past few weeks in the stock market is something.
I talked about from time to time on this channel, especially when we have huge stock market moves, either positive or negative. And it’s what we call rotation money. And this is essentially when big fund managers rotate their money out of certain industries and sectors and into other industries or sectors.
Okay. And so what you have happened is, you know, that the tweet comes out from Trump, Oh, my gosh, the tariffs are going to go up, Oh, my gosh, the trade war is not solved, it’s gonna get a lot worse. It freaks a lot of people out all of a sudden, you know, these could have real world consequences.
So it’s not like people are just scared to be scared, like literally a lot of earnings are probably going to be hurt from this over the next year. Okay, so that’s something to take into account. So it freaks people out. It gets people scared, and there’s some reason to be scared in a situation. Okay.
So a lot of people say, Oh, my goodness, okay, if I was in a risk on mode, which the market was literally just three or four weeks ago, we’re in rest on where people were flooding money into high growth stocks, semiconductor stocks, foreign stocks, anything that was once base price.
And services, things like that this is risk on time. So when people are feeling risk on, they put their money there, too. All of a sudden the tweet comes out we’re going to the tariffs are going up. Now we go over to risk off. And where money starts to rotate is no fast food stocks.
We looked at McDonald’s chart like look at McDonald’s stock drink related look at Coca Cola and Pepsi, these socks are up despite the market being down. Like that’s crazy. Okay, big pharmaceutical names, any big pharmaceutical names like look at these companies, you know, Pfizer and Merck, a lot of these companies are up.
Even though the markets are down, okay, anything that’s needs based products, we saw Walmart’s chart, okay, Walmart stocks looking pretty good, even though the markets have been, you know, in trouble essentially, recently. So all this money has started to rotate from these risk on sectors to risk off, because now at this point.
Just not as many people want to take big risk out there, they look at what’s going on, they’re like, Oh, my gosh, could things get a lot worse, or you know, and that’s, you know, it scares a lot of people. And I can completely understand that.
So you got to understand like, this is probably going to continue for at least the short term, we think about the last time the markets really started to weaken, a lot of stocks start to go down 10% 20% 30%, a lot of the risks on sector rate, let’s think about this.
For a moment, October, things started weakened in a major way, then November got even worse, December got even worse, dow went from 25 plus 1000 26,000, to 21,000. And tons of stocks were hit 20% 30% 40% in a very quick amount of time, it lasts about three months.
So I’m looking at this, I have a heart, I have, you know, a lot of trouble seeing the market necessarily recover or any of these stocks recovering over the next one to two months unless magically, a trade deal happens. And if I’m looking at anything in relation to stock prices, I think it’s going to weaken before it gets better, at least here in the short term.
If I had to make a short term prediction on this guy, so it does enable good buying opportunities and you should get you know, continue to get good buying opportunities for at least the foreseeable future between before like any type of resolution comes out of this trade situation because it could get a lot uglier.
A lot of companies could miss earnings that could drag the market lower, it can you know, drag numbers lower, a lot of people get freaked out even more and things kind of feed on themselves until eventually we clear up out of that but you know, at least in the short term.
It’s hard to see stock prices recovering in the short term or you know if anything is probably going to get a little worse in the short term which is great if you’re a buyer not good if you’re a seller in the market if you’re planning on selling shares obviously it’s not a fun time for you you’re planning on buying over the next few months.
It’s a lot more fun for you guys. So that covers my opinion on this whole situation has a stock market crash started you know, we’ll have to see if I had to make a prediction one way or another I think things are gonna get worse before they get better guys.
But anyways, let me know your opinion down there in the comment section. I would love to hear from you guys. As always make sure you smash that thumbs up button. Thank you for watching and have a great day.