By Alan Murray and David Meyer
February 6, 2018

Good morning.

I’m glad I told you to buckle up yesterday morning, because the stock market took its biggest point dive in history—1175 on the Dow—effectively eliminating all of the market’s gains since the first of the year. The rout continued around the world last night.

Bitcoin also continued its nose dive, falling below $6,000. That means the cryptocurrency has now lost half its value since the first of the year.

Only two stocks rose yesterday. Ready for it? TripAdvisor (up 3.7%) and baking soda manufacturer Church and Dwight (up 2.4%). It’s possible new Fed Chief Jay Powell was using the latter’s stuff to combat indigestion his first day in office. In a comment after his swearing in, Powell said: “Today, unemployment is low, the economy is growing and inflation is low. Through our decisions on monetary policy, we will support continued economic growth, a healthy job market and price stability.” Because of the sell-off, markets are now betting Powell will only raise rates twice this year. On Friday, they were betting on three or four rate hikes.

Still, the Dow only closed down 8.5% from its high—not yet in correction territory, defined as a 10% drop. Blackstone President Tony James said on CNBC that the market could drop by 20% this year.

Separately, why did Volkswagen pay massive fines for its emissions scandal in the U.S., but not so in Europe? Roger Parloff does a deep dive, which you can read this morning, here.

More news below.

Alan Murray


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