Bartlett Commentaries
Market Commentary, 05 / 06 / 2010
The major market indexes all tumbled sharply today in a reminder that nervousness and the accompanying volatility of the last two years has not gone away. While it is currently speculated that human error is the cause of the 7.5% drop from down 2% to a decline of approximately 10% in a matter of minutes, the first reaction was to accept that this was a real market event.
Even with a decline of just under 3% today, the S&P 500 is still up 1.6% in 2010 and an incredible +70% from the lows in March of 2009. People have been looking for a retracement of some of this market strength that we have experienced. It is true that the economic impact of the Greek crisis is relatively inconsequential on its own, however the potential for contagion to other similar countries is larger.
The investigation by the exchanges into the causes of the steep drop and rebound continues, and it may eventually be found to be due to a so called “fat finger” error. Economic fundamentals are much stronger than in March of 2009, and there is a reason to believe that this day’s drop will prove to be fleeting, but be assured that volatility will endure. We will continue to shepherd your portfolios in this challenging investment environment.
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