U.S. equities are headed for a 5 percent drop – at least – after suffering their biggest falls since the election of President Donald Trump, says Dennis Gartman, editor and publisher of the Gartman Letter.
“This is the start of at least a 5 percent correction, and perhaps something far worse than that over time,” Gartman told CNBC Wednesday, after markets began to doubt the president’s pro-growth tax reform and stimulus policies during Tuesday’s session.
U.S. markets led the declines, with the benchmark S&P 500 index tumbling 1.2 percent — and breaking a run of 109 trading days without a drop of 1 percent or more. The Dow Jones industrial average and the Nasdaq also suffered their biggest slumps of the year.
“I take this very seriously,” said Gartman, “This is not just a one off circumstance in the equities market.”
Alongside equities, base metals and crude oil posted lows while gold and bonds broke out to the upside, suggesting a wider shift in capital markets.
“I think there’s something to the downside that could be quite serious,” Gartman said. “Let us hope it’s merely a 5-7 percent correction and nothing more than that.”
