2 days of record Dow declines just a market correction? What's Your Point?
HOUSTON (FOX 26) - This week's panel: Bob Price - Associate Editor Breitbart Texas, , Nyanza Moore - progressive commentator and Houston attorney, Tony Diaz- Chicano educator and activist, Marcus Davis - host of "Sunday Morning Live", Bill King - businessman, columnist and former Kemah Mayor, and Jessica Colon - Republican strategist., join Greg Groogan to discuss the ups and downs of the U.S. stock market.
WASHINGTON (AP) - President Donald Trump is portraying the violent MS-13 gang as a collection of immigrants sneaking illegally into the U.S., an account that ignores the organization's homegrown roots and the fact many of its members are U.S. citizens.
That may suit his attempt to link illegal immigration to criminal behavior, but it's not an accurate depiction of a gang that blends foreigners and Americans and is therefore partly out of reach of border guards and other immigration authorities. Nor is he telling it straight when he says Democrats have demonstrated indifference to the problem: President Barack Obama took unprecedented actions against the gang.
In addition to his recent rhetoric on MS-13, Trump complained Wednesday that investors caused a slump in the stock market despite good economic news, unlike the "old days" when good news meant rising stocks. That's a mischaracterization of how the market works.
A look at those statements:
TRUMP: "In the 'old days,' when good news was reported, the Stock Market would go up. Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!" - Tweet Wednesday.
THE FACTS: It's not that simple, and it's not true that a positive economic indicator necessarily means a rise in stocks. The opposite can happen, depending on what sort of chain reaction is anticipated by investors.
The market dive was prompted in part by the news that wages are rising at the best pace in eight years after a prolonged bout of sluggish gains. Higher wages can lead to more inflation. The Fed could try to restrain inflation by raising interest rates, which would hurt corporate profits and limit the pace of economic growth. That's how good news for workers can come with a downside for investors.
Likewise, bad news can make the market rise. In 2016, for example, the Labor Department initially reported that employers added a mere 38,000 jobs in May. After slipping that day, the Dow Jones industrial average climbed the next trading day. A weak jobs report can cause stocks to dip briefly, then surge the following days on the belief that the Fed will hold off on rate increases.
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TRUMP: "MS-13 recruits through our broken immigration system, violating our borders, and it just comes right through; whenever they want to come through, they come through. It's much tougher now since we've been there. But we need much better border mechanisms and much better border security. We need the wall." - Remarks Tuesday at a meeting with law enforcement officials.
THE FACTS: A wall might conceivably slow but can't stop MS-13, because it is well established in the U.S. and has many U.S. citizens in its ranks - people who can't be denied entry based on their nationality, or deported.
The gang started in the 1980s in Los Angeles, initially made up largely of refugees and other immigrants from El Salvador, and "spread quickly across the country," according to a Justice Department fact sheet. An FBI assessment from January 2008 said the gang was operating in at least 42 states and the District of Columbia, roughly the same number of states estimated in 2017. It has also spread outside the U.S.
That FBI assessment said the group was made up largely of first-generation Americans and Salvadoran nationals. A decade later, the government has not said how many it thinks are citizens and immigrants. In notable raids on MS-13 in 2015 and 2016, most of the people caught were found to be U.S. citizens.
Despite the gang's decades-old history in the U.S., Trump has routinely overstated the immigrant component, saying in May 2017 it's a "large group of gangs that have been let into our country over a fairly short period of time" and blaming the Obama administration for having "allowed bad MS-13 gangs to form in cities across U.S."
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TRUMP: "The ones that don't want security at the southern border, or any other border, are the Democrats. They don't care about the security of our country. They don't care about MS-13 killers pouring into our country. ... Nobody was bringing them out before us." - Speech Monday on Ohio.
THE FACTS: Recent history does not show such indifference. The U.S. carried out record deportations during the Obama administration and, on MS-13 specifically, took the unprecedented action of labelling the street gang a transnational criminal organization and announcing a freeze on its U.S. assets.
Trump's own Justice Department has indirectly credited the Obama administration, in its early years, with putting heavy pressure on the gang. It said, "Through the combined efforts of federal, state and local law enforcement, great progress was made diminishing or severely (disrupting) the gang within certain targeted areas of the U.S. by 2009 and 2010." That was not enough to crush MS-13 and Trump is taking extra steps toward that goal. But he is not the first to go after the gang.
The results so far are not clear. Attorney General Jeff Sessions said last month the U.S. has "worked with our international allies to arrest or charge more than 4,000 MS-13 members." That suggests at least some of the 4,000 weren't in the U.S. when they were arrested and aren't now in U.S. prisons.
Associated Press writers Jill Colvin and Eric Tucker contributed to this report.
Find AP Fact Checks at http://apne.ws/2kbx8bd
Wall Street is making a good case for buying stock in Maalox and Tums.
In another stomach-churning day Tuesday, stocks plunged in the morning, then pulled off a late-afternoon rally, ending the day in positive territory and recouping some of the losses from the market's two-day plunge.
"The positive for the market is that we came back today in very convincing fashion, but I certainly would not say it's all done, the Wicked Witch is dead," said JJ Kinahan, chief investment strategist for TD Ameritrade. "Brace for volatility and strap yourself for the next couple of weeks."
The Standard & Poor's 500 index is now up just under 1 percent for the year. It had been up as much as 7.5 percent less than two weeks ago.
The bounce-back no doubt came as relief to many Americans made queasy by the drop in their retirement savings and investment accounts.
But for a while Tuesday, it was ugly and getting uglier.
After its 1,175-point nosedive Monday, the Dow Jones industrial average sank an additional 567 points right after trading began Tuesday. Several ups and downs later, the Dow finished the day with a neatly symmetrical gain of 567 points, closing at 24,913.
The big sell-off over the past few days was triggered, at least in part, by fears of inflation and higher interest rates. But the rebound showed that even after going through the worst market tumble in more than six years, some investors are still in a buying mood.
That's been one of the characteristics of the remarkably resilient, nearly nine-year bull market: Time and again, buyers have stepped in within a day or two of a market drop and wiped out the decline.
"While the sharp decline in the S&P 500 on Monday was unnerving, it is important to keep in mind that these kinds of moves have tended to be buying opportunities in the post Financial Crisis era," Lori Calvasina, head of equity strategy at RBC Capital Markets, wrote in a research note Tuesday.
Going back to 2010, the S&P 500 index has fallen 3 percent or more in a single day 15 times. And each time, the index, which is the benchmark most professionals and many index funds use, had been meaningfully higher six months later, Calvasina noted.
Even so, one couldn't blame investors for forgetting this trend, as the market didn't drop more than 3 percent on a single day all last year.
The question is, was Tuesday too soon to buy back in?
"There's no question that the level of risk in buying the dip from this point forward is going to be higher than it was through any time last year and really even a year before that," said Randy Frederick, vice president of trading & derivatives at Charles Schwab. "That's why it's wise to just sit and watch here for another day or two and see where things settle out."
Other Wall Street insiders say the worst is over.
"I believe this is the bottom," said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. "This is not 2008, when we were really seeing a massive broad-breadth market sell-off. Economically, we're in too good a shape."
The turbulence has yet to rattle Susan McCauley, of Marietta, Georgia, a 66-year-old investment portfolio administrator who said she is not shifting away from stocks, despite the big tumble.
She recently decided to push back her retirement from 68 to 70 to give her more time to save up a bigger nest egg.
"Now that looks even more like a good decision, because it will give me time to invest more and give the market time to recover," she said.