It's been forever since stocks took a tumble

Even the best marathon runners need to take a breather eventually.Unless the race is on Wall Street. Stocks ha...

Posted: Jan 11, 2018 3:32 PM
Updated: Jan 11, 2018 3:32 PM

Even the best marathon runners need to take a breather eventually.

Unless the race is on Wall Street. Stocks have powered higher since President Trump's election with barely a stumble.

That's highly unusual: Market declines are normal and healthy, even during historic rallies.

Yet the S&P 500 hasn't retreated 3%, either in a single day or over several days, since early November 2016. That is the longest period of calm in history, shattering the record from the mid-1990s, according to Bespoke Investment Group.

And you have to go back to June 2016 -- weeks before Trump wrapped up the Republican presidential nomination -- to find the last time the S&P 500 suffered a 5% pullback.

If that streak continues until January 22, a real possibility, it would also break the all-time record of 394 trading days set in the mid-1990s, according to LPL Financial.

"We have been extremely spoiled by the action (or lack of action) over the past year," Ryan Detrick, LPL's senior market strategist, said in an email. "To think that 2018 will be as tranquil as 2017 could be quite foolish."

Peter Oppenheimer, chief global equity strategist at Goldman Sachs, told Bloomberg on Wednesday that "a correction is potentially overdue."

Related: Everything's near a record. Is the market too hot?

Extreme calm has washed over Wall Street. The VIX, which measures market volatility, recently closed at its second-lowest level ever. CNNMoney's Fear & Greed Index of market sentiment is flashing "extreme greed."

And as the Dow zips through milestone after milestone -- it took just a month to go from 24,000 to 25,000 -- concerns have grown that the market is on the verge of overheating.

Some analysts have warned of a so-called melt-up, an unsustainable race higher that isn't based on fundamentals. The Dow and Nasdaq have climbed about 38% apiece since President Trump's 2016 election.

Even corporate executives may be getting more cautious about the market.

Eighty-four percent of chief financial officers polled by Deloitte say U.S. stocks are overvalued. That's the highest since the Deloitte survey began in 2010. Just 2% believe stocks are a bargain.

The figures suggest companies should be somewhat reluctant to use the bulk of their savings from the tax law to buy back shares of their own stock.

Investors who lost a great deal of money during the terrifying 2008-2009 market meltdown certainly aren't complaining about the tranquility. And there are reasons for the good times on Wall Street.

The U.S. and global economies are doing great. Even Europe is on the upswing. Corporate profits have never been stronger -- and the tax law should give earnings a boost. The Federal Reserve hasn't abandoned its plan to raise interest rates just gradually.

Related: Trump slaps tariffs on Canadian paper

So what could disturb the calm on Wall Street?

One obvious threat is the nuclear standoff with North Korea. While North Korea and South Korea have started talks, tensions are always just one missile launch -- or tweet -- away from escalating.

BlackRock's geopolitical risk indicator, which tracks how often geopolitical worries are mentioned in the media and in brokerage reports, has jumped over the past year to the highest level since March 2015.

Even though they can be scary, geopolitical events tend to have just a fleeting impact on the stock market because they rarely derail global economic growth.

One geopolitical risk that would threaten the rejuvenated global economy is a trade war. A clash between the United States and China or the collapse of NAFTA could rock the market as well as the economy.

"We are most worried about the potential for a protectionist U.S. approach to trade," Richard Turnill, BlackRock's global chief investment strategist, wrote in a report this week.

Another recent concern: Bond rates have been creeping higher. For years, extremely low rates have forced investors into riskier assets like stocks. While the 10-year Treasury still remains very low at 2.56%, a rapid surge in rates would probably rattle Wall Street.

No matter the cause, the stock market will eventually suffer a setback -- and investors may be caught off guard.

"Don't panic when we finally do get a 5% correction," Detrick said. "They tend to happen most years and are perfectly normal."

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 501652

Reported Deaths: 10024
CountyCasesDeaths
Harrison34353540
DeSoto32162408
Hinds31977631
Jackson24508383
Rankin22015390
Lee15596235
Madison14597280
Jones13867243
Forrest13461252
Lauderdale11998317
Lowndes11065188
Lamar10522136
Pearl River9547237
Lafayette8557140
Hancock7740127
Washington7443160
Oktibbeha7147133
Monroe6787178
Warren6706176
Pontotoc6677104
Neshoba6642206
Panola6542131
Marshall6476135
Bolivar6323150
Union605794
Pike5824152
Alcorn5676102
Lincoln5439135
George497479
Scott473098
Tippah470381
Prentiss469182
Leflore4663144
Itawamba4640105
Adams4592119
Tate4592111
Copiah448792
Simpson4448116
Yazoo444887
Wayne440072
Covington429094
Sunflower4240105
Marion4232108
Coahoma4168107
Leake408688
Newton381779
Grenada3711108
Stone360664
Tishomingo360092
Attala331789
Jasper330165
Winston314691
Clay308977
Chickasaw301067
Clarke292594
Calhoun279447
Holmes267987
Smith264150
Yalobusha234547
Tallahatchie228251
Greene219449
Walthall218764
Lawrence213140
Perry205956
Amite205256
Webster203046
Noxubee186840
Montgomery179657
Jefferson Davis172243
Carroll169338
Tunica160039
Benton149239
Kemper141941
Choctaw133326
Claiborne132837
Humphreys129638
Franklin120328
Quitman106528
Wilkinson105139
Jefferson94734
Sharkey64220
Issaquena1937
Unassigned00

Alabama Coronavirus Cases

Cases: 820312

Reported Deaths: 15407
CountyCasesDeaths
Jefferson1148731924
Mobile726221339
Madison52362697
Shelby37640350
Baldwin37266552
Tuscaloosa35120612
Montgomery34123740
Lee23540246
Calhoun22236488
Morgan20958378
Etowah19838500
Marshall18381304
Houston17394412
St. Clair16078339
Cullman15468293
Limestone15354199
Elmore15271286
Lauderdale14323295
Talladega13851283
DeKalb12664261
Walker11221370
Blount10207176
Autauga10048148
Jackson9877184
Coffee9211191
Dale8904185
Colbert8877201
Tallapoosa7093198
Escambia6778134
Covington6715183
Chilton6648162
Russell637559
Franklin5969105
Chambers5612142
Marion5010127
Dallas4979200
Pike4796106
Clarke475884
Geneva4575127
Winston4522103
Lawrence4327117
Bibb425386
Barbour357876
Marengo338390
Monroe331664
Randolph329864
Butler326796
Pickens316584
Henry312866
Hale311688
Cherokee302960
Fayette294180
Washington251651
Cleburne247760
Crenshaw245375
Clay243368
Macon234863
Lamar224847
Conecuh186353
Coosa180340
Lowndes175464
Wilcox168939
Bullock151744
Perry138940
Sumter133238
Greene126744
Choctaw88527
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Columbus
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Oxford
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Starkville
Clear
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High pressure will dominate our weather forecast for our Tuesday. This means we will see some good weather for our Tuesday. However, some rain and thunderstorms will be in our weather forecast down the line with some more low pressure in our area.
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