So much for the doom - stocks markets end week higher!

So much for the doom - stocks markets end week higher!

Don't you just love all the doom and gloom headlines, after Wednesday's stock market falls around the world!

"Dow Jones suffers steep fall and FTSE 100 in bear market" - The Guardian, UK

From horrible to just bad: Dow ends down 249 points  - money.CNN.com

Stock markets plunge as investors fear global economic slowdown - The Guardian, UK

Never before has Wall Street gotten off to a worse start to a year - US News

And many many others.

Whilst it's true stocks markets around the world have a taken a battering this year, I think it is important to reflect on the wider context than a single days worth of trading!

So let's look at what has happened to the FTSE 100 and Dow Jones indexes this week:

FTSE 100

So looking at this graph we can see on Tuesday we saw the FTSE 100 rise in value. 

We then saw the bad day of Wednesday that generated all the bad press.

Thursday and Friday then saw further gains made.

The end result being that the index actually ended the week higher than it started the week, thereby gaining all the value (and more) that was lost on the Wednesday to forget!

Dow Jones

Looking at the graph for the Dow Jones index over the same week period, we can see that it mirrors what happened with the FTSE 100 Index.

That is, gains on Tuesday, big loss on Wednesday, followed by gains on Thursday and Friday.  With the index ending the week higher than it started at!

What next for the headline makers?

Whilst it is true these indexes are trading significantly below their peaks of last year, is it time the headline makers ignore big signal day falls and take a slightly wider view of the markets?

Are we entering a period of large volatility in the indexes, where we can see large falls one day followed by recovery (and more) the next?

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