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If you feel like the second quarter began badly, you’d be right.
U.S. stocks had their worst April start since 1929, according to data compiled by Bloomberg. The S&P 500 index slumped 2.2 percent, a rout exceeded only by its 2.5 percent decline 89 years ago, a prelude to the devastating crash later that year that brought on the Great Depression. (Back then, the index only comprised 90 stocks.) https://www.bloomberg.com/news/articles/2018-04-02/stocks-second-quarter-start-is-worst-since-great-depression
No question about today being a pretty bad start. But worst since 1929, according to data compiled by Bloomberg?
I don't think so. It's just citing data compiled by S&P (or by Standard Statistics Company, one of the predecessor companies to S&P).
More importantly, as Bloomberg notes, it (well, S&P, actually) used an index of just 90 stocks. It turns out that starting in the 20s there were two composite indexes, a daily composite with 90 stocks, and a weekly composite with 400+ stocks by 1929.
It is apparent that the historical record of stock prices and returns based on S&P data, ... consists of a mixture of measures that lacks consistency of definition. To date, the following observations emerge: (1) No study to date has presented a “true” composite of S&P prices and returns for the “modern” period from 1926 based on the S&P weekly data, which contain more than 400 stocks. The 30-year period rom 1926 to 1956 contains only 90 stocks, and the performance of the 90 stocks was quite different from the broader market representations
Even the "standard" (500 stock) S&P 500 index has changed significantly.
Indeed, S&P attributes the delay of including financial stocks in the composite index until 1976 to “the difficulty of including Over-the-Counter stocks in our computerized calculations.”
So we may never know for sure which year "U.S. stocks had their worst April start", as Bloomberg wrote. (BTW, this 90 stock index was up for the month of April 1929.)
Quotes are from: Wilson and Jones, An Analysis of the S&P 500 Index and Cowles’s Extensions: Price Indexes and Stock Returns, 1870–1999, The Journal of Business Vol. 75, No. 3 (July 2002), pp. 505-533.
Comments
I don't think so. It's just citing data compiled by S&P (or by Standard Statistics Company, one of the predecessor companies to S&P).
More importantly, as Bloomberg notes, it (well, S&P, actually) used an index of just 90 stocks. It turns out that starting in the 20s there were two composite indexes, a daily composite with 90 stocks, and a weekly composite with 400+ stocks by 1929. Even the "standard" (500 stock) S&P 500 index has changed significantly. So we may never know for sure which year "U.S. stocks had their worst April start", as Bloomberg wrote. (BTW, this 90 stock index was up for the month of April 1929.)
Quotes are from: Wilson and Jones, An Analysis of the S&P 500 Index and Cowles’s Extensions: Price Indexes and Stock Returns, 1870–1999, The Journal of Business Vol. 75, No. 3 (July 2002), pp. 505-533.
http://www.jstor.org/stable/10.1086/339903?seq=1#page_scan_tab_contents