SAN FRANCISCO (KPIX) — By the time the final bell rang Monday, the Dow’s fall was the largest Christmas Eve tumble in market history.
The Dow closed down more than 650 points after a holiday-shortened trading day.READ MORE: Outrage Grows Over Racist Comments Targeting KPIX 5 Reporter Betty Yu
Since early October, the Dow has lost more than 5,000 points, and the tech-heavy NASDAQ, more than 1,800 points. In fact, the NASDAQ’s drop has been so severe (23 percent) it is officially a “bear market” which is something we haven’t seen in a decade.
For Bay Area companies, these losses are hitting especially hard.
“What happens when you see this much loss of market value is companies are gonna be much more hesitant to invest,” said Jim Wunderman, President of the Bay Area Council. “When they do that, that means less new jobs, less promotions for people and so forth.”
The Council’s members are mostly large companies and nearly all headquartered in the Bay Area. Among members, “you’re hearing this kind of talk – lets have a little more patience out there when it comes to taking the next step,” Wunderman said.
The Bay Area economy is somewhat diverse, with sectors like business services, healthcare, and energy.READ MORE: Man Who Spent 46 Years In Prison Wrongly Convicted of San Francisco Rape, Murder Finally Exonerated
“But a lot of the economy is built around tech,” Wunderman said. “I think if you see a downturn on the tech side it’s going affect the whole Bay Area economy, there’s not way around it.”
He said the current market behavior was unique in that it’s not related to the underlying economy. Traditionally, problems in the economy have caused the market to fall.
One example is the 2008 crash that was caused by real estate recklessness. But the current economy is strong, so the market is being spooked by something else: overwhelming unpredictability.
“We haven’t seen this much uncertainty heaped upon itself, I don’t know, if ever,” Wunderman said.
He cited the recent announced troop pull out from Afghanistan and Syria, the departure of Gen. Mattis from the cabinet and the government shutdown as contributing to market anxiety.
“It’s not surprising that this much uncertainty would have a big effect on the downside on Wall Street,” he said. “If it didn’t you’d kind of wonder, are people not paying attention?”MORE NEWS: Massive Caldor Fire 100% Contained After Threatening Lake Tahoe Region
Still, it doesn’t appear to be a permanent retreat from the market. Investors who have stepped back are “just gonna wait until the storm blows over. Hopefully it does that.”