This isn’t a stock-market crisis; it’s an outright ‘selling stampede’

Jeff Saut says such stampedes tend to last 17 to 25 sessions

The market is currently in panic mode. Investors across the globe are wading in a sea of deep red, sparked by concerns about slumping global growth — otherwise known as China.

But Jeff Saut, chief investment strategist at Raymond James, appears to be suggesting that the selloff that has gripped markets over the past several days is equivalent to what he describes as a “selling stampede” that could last about a month before it’s exhausted.

In other words, he (unlike George Soros) is holding off before calling this a crisis.

“For whatever reason, our stock market, at least at this point, looks like it is involved in a ‘selling stampede.’ Such stampedes tend to last 17-25 sessions with only one to three session pauses/rally attempts before they exhaust themselves, and we are only five sessions potentially into this one,” Saut wrote in research note dated Thursday.


Saut told MarketWatch he’s sanguine about the long-term prospects for U.S. stocks in the face of another plunge in China’s Shanghai Composite Index SHCOMP, +1.97%  and the subsequent trading halt. Hours after the market closed, Beijing suspended its so-called circuit breakers (which come into play if the market falls by a certain measure), but it isn’t clear whether that move will serve to calm the markets.

“I’m still in the long-term bull camp unless the Dow DJIA, -1.02% falls below its August lows,” Saut said in a phone interview. The Dow Jones Industrial Average fell to 15,446.47 then, according to FactSet data, as the chart below shows. The S&P 500’s SPX, -1.08%  August low is 1,867.61, FactSet data show.

“The U.S. has solved many of its long-term problems,” Saut said. “Banks are less leveraged, the deficit is under control, balance sheets are strong.”

Saut isn’t alone in his tempered optimism about the U.S. economy: “I’m not pounding the table on the U.S. economy, but it’s in OK shape,” Boll Doll, chief equity strategist at Nuveen Asset Management, told CNBC in a Thursday morning interview.

On the decidedly less optimistic end of the spectrum is Soros. The billionaire investor equated this recent bout of selling to the financial Armageddon that swept markets in 2008.