Sometimes, it takes only the promise of a massive government bailout to put that rose-colored filter on the effluent sandwich of today’s economic realities.
After yesterday’s terrifying sell-off, American equities recovered today, with the major domestic indices rising to close the day. While the day’s gains do not erase yesterday’s losses, they are a welcome return to form for equity markets long-accustomed to rising.
The final results in less turbulent times would be more shocking, but today the Dow Jones Industrial Average rose 1,167.1 points, or 4.89%, the S&P 500 rose 135.7 points, or 4.94%, while the Nasdaq Composite picked up 393.6 points, or 4.95%.
SaaS and cloud stocks, however, lagged their broader sector, only managing a 3.1% gain, according to the Bessemer-Nasdaq cloud index. This means that after SaaS and cloud stocks lost more yesterday (in percentage terms), they also recovered less than their peers. After a long period of leading, modern software companies are being repriced in the public markets, possibly leaving the company category with less of a premium over other tech companies.
The rally was broad, with bitcoin ending a period of decline, and oil sharply ascending.
Still, the public markets are down from their heights. The Dow is off 15%, and touched a new 52-week low today before recovering. The S&P is also off a smidgen over 15%, while the Nasdaq is down a hair more at 15.2%, compared to its recently set 52-week highs.
A few more days like today are needed, then, to fully repair the damage. And there’s still the overhang of bad news, including: a quarantine zone set up in New Rochelle, N.Y.; the terrible shape of oil and gas companies’ debt loads; and the lack of any clarity around an actual bailout from the government.
Hopefully tomorrow morning stocks are quiet, and then the TechCrunch Public Markets Crew (Shiebs and Alex) can stop writing these posts. Until then, however, expect more.
As a final note, Apple and Microsoft are still trillion-dollar companies. So even in the throes of this correction, tech is hardly in the dumps. And the Nasdaq is up 12.6% over the last year.