Bear Market: The Average U.S. Stock Is Already Down More Than 20 Percent

The stock market is in far worse shape than we are being told.  As you will see in this article, the average U.S. stock is already down more than 20 percent from the peak of the market.  But of course the major indexes are not down nearly that much.  As the week begins, the S&P 500 is down 9.8 percent from its 2015 peak, the Dow Jones Industrial Average is down 10.7 percent from its 2015 peak, and the Nasdaq is down 11.0 percent from its 2015 peak.  So if you only look at those indexes, you would think that we are only about halfway to bear market territory.  

Unfortunately, a few high flying stocks such as Facebook, Amazon, Netflix and Google have been masking a much deeper decline for the rest of the market.  When the market closed on Friday, 229 of the stocks on the S&P 500 were down at least 20 percent from their 52 week highs, and when you look at indexes that are even broader things are even worse. 

For example, let’s take a look at the Standard & Poor’s 1500 index.  According to the Bespoke Investment Group, the average stock on that index is down a staggering 26.9 percent from the peak of the market…

 Here’s a statistical damage assessment, provided by Bespoke Investment Group, of the pain being felt by the average U.S. stock in the S&P 1500 index: 

* Large-company stocks in the S&P 500 index are down 22.6%, on average, from peaks hit in the past 12 months. 

* Mid-sized stocks in the S&P 400 index are sporting anaverage decline of 26.5% since hitting 52-week highs. 

* Small stocks in the S&P 600 index are the farthest distance away from their recent peaks. The average small-cap name is 30.7% below its high in the past year.

DYI