Far From Unprecedented: Nine Routs Like This, and Nine Rebounds

(Bloomberg) -- The selloff that’s been battering investors for nine days feels like the worst thing ever -- it’s far from that.

Nine times since the bull market began in 2009 have equities experienced stretches as gruesome as this one; each time the end of the world was averted.

Here’s a quick walk down bad memory lane.

January 2016

Concern about an economic slowdown and mounting debt in China’s economy sent the S&P 500 Index down 11 percent over the course of three weeks. There were 13 days when the market lost at least 1 percent, with bear market anxieties igniting Feb. 11 when stocks hit a 22-month low. Then it was over, with the S&P 500 advancing 11 percent over the next month. By mid-April, all of the January losses were gone. 

August 2015

Blame the world’s second-largest economy for this one, as well. Angst over China’s shock devaluation of the yuan and a rout in Asian equities triggered a 1,000-point slump in the Dow Jones Industrial Average on Aug. 24. Greece’s debt crisis soured sentiment further, albeit not for a long while. The S&P lost 11 percent over the course of six sessions only to wipe out the losses in the next two months.

October 2014

The spread of the Ebola virus, concern about the end of Quantitative Easing and tensions in the Middle East triggered a 460-point rout in the Dow average on Oct. 15, widening a selloff that started a week earlier to 5 percent. The rout faded as quickly, and the Dow recouped all the losses in the next two weeks even as a doctor in New York tested positive for the virus.

January 2014

A rout in emerging markets stocks and currencies triggered a 3.6 percent slide in January, the worst monthly performance since 2012. The selloff wasn’t abrupt; on just three days did stocks fall more than 1 percent over the course of the month. A 4.3 percent advance in the S&P 500 in February was the start of a five-month streak of gains.

October - November 2012

Uncertainty leading up to the 2012 election between Barack Obama and Mitt Romney and a weak jobless claims report were behind the S&P 500’s 7.1 percent decline between Oct. 18 and Nov. 15. The retreat included 5 drops of more than 1 percent. Eleven weeks later it was over and the benchmark climbed back above its level.

March - June 2012

Federal Reserve minutes showing the central bank would hold off more easing unless U.S. economic expansion faltered were behind a nearly 10 percent decline from April to June of 2012. The S&P fell 9.9 percent between April 2 and June 4, including nine drops of more than 1 percent. About five months later it was over and the benchmark recouped its losses.

July-August 2011

The U.S. government was stripped of its pristine credit rating after Congress played chicken with the debt ceiling. A lackluster jobs report didn’t help. The S&P 500 fell 17 percent between July 7 and Aug. 8, including five drops of more than 1 percent and two of more than 4 percent. About seven months later it was over and the benchmark climbed back above its level.

2010

There were two additional drawdowns in 2010, an 8 percent pullback that began in January and was over by the end of the next month, and a 16 percent slide that started in April and didn’t end until July. The infamous flash crash, on May 6, 2010, occurred in that period.

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