Plop, Plop, Fizz, Fizz
Yesterday (April 9th) was a surprising day in the stock market. After multiple days of downward pressure, coupled with investors’ fear increasing (the Fear & Greed Index reached an all time low of 3 on Tuesday evening – see my previous blog), and recession concerns rising, things changed. The President paused his broad tariff plan. Plop, plop, fizz, fizz oh what a relief rally it was. The S&P 500 closed up 9.5%, the best day since October, 2008. The Nasdaq Composite closed up a whopping 12.16%, the second biggest percentage rise in history. The only bigger one day gain was in January, 2001. Indulge me as I offer some perspective.
Do you remember the “plop, plop, fizz, fizz” reference? That was the iconic jingle for Alka-Seltzer commercials originally used in 1976. Yes, it was a very catchy jingle.
According to the label, the product relieves heartburn and acid indigestion. Maybe you used some Alka-Seltzer recently; investors and, more broadly, the global citizenry experienced a bit of heartburn and indigestion stemming from the tariffs. I heard many clients voicing serious concerns, and these concerns are warranted.
But back to the jingle. I bet you didn’t know that the plop, plop, fizz, fizz jingle was written by a former bass guitar player for the rock band The Cyrkle. Thomas W. Dawes was his name. He became a successful jingle writer after a short career as a bass player. And another fun fact, The Cyrkle once played as a front band for the Beatles. I bet that was the highlight of their career.
Relief rallies like the one we had yesterday are not new. Been there, done that. When markets are under immense pressure and there is no logical end in sight, poof! We get some unexpected news and markets turn around.
But you may need some perspective. The two dates referenced above (January, 2001 and October, 2008) were smack in the middle of big bear markets. In January, 2001 the stock market staged a relief rally and then continued on a downward decline until October, 2002. In October, 2008, the brief relief was followed by five more months of pain. Do I think we are in for more pain and a big bear market? No, I honestly do not. But this market is bouncing like a red rubber ball right now. Expect volatility. Investor conviction is not strong. Period.
The roller coaster of the past few weeks challenges us: are we investors for the long term? Or are we going to get scared of the ride and jump off? I can’t tell you what’s next, but I’ll be here to listen to your concerns and offer you guidance.
Last question: Do you remember the song “Red Rubber Ball”? Ironically, it was the top hit for The Cyrkle, a fun and catchy song that I have enjoyed for many years. The opening line: “I should have known you’d bid me farewell”. I look forward to saying “farewell” to this volatile market but am pretty sure I can’t say it yet. And it may help to remember the second line of the song: “there’s a lesson to be learned from this and I learned it well”.
Ralph McDevittApril 10, 2025
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