Bloomberg Intelligence's 'Equity Market Minute' 10/6/2022

Gina Martin Adams discusses the Market Pulse Index, which identifies extreme panic and mania in the equity market. As of September, panic levels were high, comparable to historical periods like 2001, 2008, 2011, and 2016. Despite the fear, three of these periods were followed by strong market returns, except for 2001. The S&P 500 showed an 11% return over 12 months after these lows, increasing to 22% when excluding 2001. Extreme fear can sometimes lead to positive stock outcomes.

What is the primary purpose of the Market Pulse Index?

• To evaluate company performance

• To measure economic growth

• To detect periods of extreme panic and mania in the equity market

• To predict future stock prices

Which of the following years did NOT see strong market returns following extreme fear?

• 2016

• 2011

• 2008

• 2001

What common factor is shared by the years 2001, 2008, 2011, and 2016 in the context of the market gauge?

• High economic growth

• Low inflation rates

• Extreme fear in the market

• Technological advancements

What was the average positive return of the S&P 500 over 12 months, excluding 2001?

• 30%

• 11%

• 15%

• 22%

How can extreme fear sometimes be beneficial for stocks?

• It results in higher interest rates

• It causes a decrease in stock prices

• It often precedes strong market returns

• It leads to increased market volatility