Why this overlooked ‘black swan’ poses a ‘monstrous’ risk to the stock market:
The stock market’s been looking fairly strong lately, with the Dow Jones Industrial Average DJIA, +0.14% rallying for the sixth session in a row. But with each uptick, and each unsettling headline, there seems to be an increasing call for caution.
He pointed to this SocGen chart, in which he marked up to show what he considers the most troubling for investors: “A sharp market repricing should be the fattest swan on that diagram,” Renick continued. “The greatest risk to investors, the economy, and the tenuous state of geopolitics, is the price of the S&P 500 SPX, -0.07% . That does not mean it is the most likely risk — what it means is that the ripple effect of a sizable selloff in stocks right now is monstrous.
Nothing like that this week. The Dow was up triple digits at last check, while the S&P and Nasdaq COMP, -0.22% were also logging solid gains. Shawn Langlois Shawn Langlois is an editor and writer for MarketWatch in Los Angeles. Follow him on Twitter @slangwise.
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