Whole Lotta Shakin’ Goin’ On

Well, come on over baby
Whole lot of shakin' goin' on
I said come on over baby
Baby, you can't go wrong
We ain't fakin'
Whole lotta shakin' goin' on

Well, come on over baby
We got chicken in the barn
(Whose barn, what barn, my barn)
I said come on over baby
Really got the bull by the horn
We ain't fakin'
Whole lotta shakin' goin' on

(From “Whole Lotta Shakin’ Goin’ On”, written by Dave "Curlee" Williams and James Faye "Roy" Hall, recorded by Jerry Lee Lewis, 1957)

We're caught in a trap
I can't walk out
Because I love you too much, baby

Why can't you see?
What you're doing to me
When you don't believe a word I say?

We can't go on together
With suspicious minds
And we can't build our dreams
On suspicious minds

(From ”Suspicious Minds”, by Mark James, recorded by Elvis Presley, 1969)

Last month, we referenced the phrase “October Surprise” in its usual political context. Well, we certainly had a surprise, but it was markets-related rather than political. After months of investor complacency and a sky-rocketing technology sector, the markets suddenly got spooked on the backs of global trade tensions, non-US economic deceleration (especially in China), a very strong US dollar, and the seeming realization that the growth catalysts provided by the tax law reforms, regulatory relief, and fiscal stimulus would, at some point, work through the system and begin to trail off.

The market decline has been fairly continuous since late August, right through late-November, as we write this. A pre-Thanksgiving Wall Street Journal article pointed out that since its September 3rd peak, the S&P 500 index had fallen 7.7%, while the NASDAQ index, which is dominated by tech stocks, had fallen 13.3% since its August 29th peak. As we go to publication, all major global equity markets are now trading in negative territory for the year.