JP Morgan Calling for a -40% Drop in the Market

This is an easy call to make by JP Morgan. If they are wrong, no one will remember. If they are right, they are the firm who predicted it would happen. A couple of things to point out. First, a -40% decline is not a correction. It is a bear market. Second, if this market were to lose as much as -40%, it probably would end up being -60% before it was all over with. In February the Dow barely dropped into correction territory (-10% and above) and they sold the most stock funds in history in a month according to TrimTabs. If this market starts getting big losses, investors will run for the hills. It will be like throwing gas on a fire.

Just like radar detectors alert us to "smokey bear" on the highway it seems like we keep hearing alerts bout a looming bear market - we should take it seriously. I don't know if this is accurate but it seems like the market seems to do better during a Democrat president's term and worse during a Republican president's term. So far under Trump the market is booming so I guess time will tell.

@jmarkb - There is not a consistent statistic to point to one or the other. I find that Presidents are either victims or benefactors of the cycle. Clinton had the best cycle of all. It is all about the cycles.

Yeah, that is what your guest today said too so maybe that's just it.