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S&P 500 Makeover: 30+ companies on the edge


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#1 Rogerdodger

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Posted 16 May 2020 - 09:21 AM

Drastic Makeover Looms for World's Most Followed Stock Index

(Bloomberg) — The workings of passive investment indexes in times of crisis is already a subplot of the virus drama following histrionics in the oil market. It’s shaping up as a flashpoint in stocks, too, as overseers wrestle with pushing the eject button on wounded companies.

“The S&P committee is going to have to decide how long they want to wait before ditching COVID-damaged companies,” said Nicholas Colas of DataTrek Research, who sees more than 30 companies teetering on the edge of removal. “The S&P 500 may be the world’s most-followed passive index, but COVID-19 and its aftermath is going to force its constructors into some very active choices.”

 

Four dozen ejections have occurred over the last three years, deletions that centered on retail, industrial and energy companies, which have struggled the most during the virus.

 

Oil and gas companies including Chesapeake Energy Corp. and Transocean Ltd. are still off by 80% or more. Bed Bath & Beyond Inc. and Macy’s Inc. are down roughly 70%.
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Edited by Rogerdodger, 16 May 2020 - 09:45 AM.


#2 Rogerdodger

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Posted 16 May 2020 - 10:05 AM

FED: Financial system 'under severe strain'...

 

Fed Warns of Significant Hit to Asset Prices If Crisis Grows

The Federal Reserve issued a stark warning Friday that stock and other asset prices could suffer significant declines should the coronavirus pandemic deepen, with the commercial real estate market being among the hardest-hit industries.


Edited by Rogerdodger, 16 May 2020 - 10:52 AM.


#3 MikeyG

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Posted 16 May 2020 - 10:08 AM

Its a tech world and the virus has increased that.

The Nasdaq is the engine now.

#4 pdx5

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Posted 16 May 2020 - 10:22 AM

Tech exuberance should end when virus is gone.

Tech can't drive you to work, can't wash your clothes, can't fix your roof, can't repair your car's transmission, can't heat your home in winter or cool it in summer, can't fly you to see relatives, and can't service you in hospital. Main street economy does all of that and should be the next leader. People are not going to stay in their basement post-virus.


Edited by pdx5, 16 May 2020 - 10:23 AM.

"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#5 Darris

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Posted 22 May 2020 - 10:53 AM

This article suggests similar outcome for Russells pulling from Nasdaq issues.  Probably a good reason we are seeing $NAUD rise so fast.

https://www.barrons....d=md_usstk_news