Stock rout defying bulls on all fronts

VALUATIONS aren't stopping it. Jerome Powell's softer tone failed to soothe anyone. The moratorium on tariffs is a fading memory and now the sturdiest chart level of the year is in danger of giving way.

A stock rout that bulls thought was finished three different times since October is in a new and ominous phase, with the Dow Jones Industrial Average losing 1,004 points in two days. No Santa Claus rally. Instead, the S&P 500 Index is hurtling towards the second-worst December on record.

"The stock market doesn't care what looks good now. It's wondering if fundamentals will deteriorate in the future," said Peter Mallouk, co-chief investment officer of Creative Planning, which has around US$36 billion under management. "You have a lot of people that are scared, and they're sitting on the sidelines to wait it out." Waiting it out is starting to look like the only viable strategy. On Monday, the S&P 500 briefly pierced a level that had been a psychological foundation for 10 months, its intraday low from Feb 9. Valuations shrink and shrink - computer and software stocks trade at 15 times next year's earnings estimates, cheaper than utilities and soapmakers - and the selling just gets worse.