Stocks dive on Dow’s worst day since 1987, tech crashes, and Bitcoin is no haven
March 12, 2020 at 16:58 PM EDT
Well, that was terrible. During the day’s wild trading session, the Dow Jones Industrial Average (DJIA) dropped by just under 10% in what was the largest single-day percentage decline since the stock market crash in 1987 (when markets were sufficiently scarred to institute failsafe measures for the future). COVID-19 market turmoil tests NYSE’s shutdown circuit-breakers […]
Well, that was terrible.
During the day’s wild trading session, the Dow Jones Industrial Average (DJIA) dropped by just under 10% in what was the largest single-day percentage decline since the stock market crash in 1987 (when markets were sufficiently scarred to institute failsafe measures for the future).
Investors shrugged off news that the Federal Reserve was stepping in to offer nearly $1.5 trillion in emergency relief as the major indexes all fell sharply the morning after President Donald Trump addressed the nation to outline the government’s continued response to the novel coronavirus outbreak.
Looking at the major American indices:
It’s possible that investors continued their selling streak because any short term gains from the Federal Reserve’s efforts to reverse the slide now has implications for the long-term health of the American — and global — economy. (The American and global economics are incredibly linked, of course).
“We continue to emphasize that this Fed will act aggressively and in particular that central banks are focused on safeguarding market functioning at this point, and will continue to provide liquidity in scale,” Ebrahim Rahbari, director of global economics at Citi Research, told CNBC. “However, despite the sharp initial risk rally, we think these measures will still not be sufficiently to durably stabilize market sentiment yet in light of credit concerns and escalating health concerns.”
Meanwhile more American institutions are being disrupted by efforts to mitigate the spread of the novel coronavirus sweeping the country. Broadway was shut down, major sports events have all been canceled and entire seasons are being put on hold.
It’s against that backdrop that investors took to the hills.
Not even cryptocurrencies were safe from the rout. Bitcoin and all of the other major cryptocurrencies suffered their worst declines in years as investors also sold heavily. SaaS shares were down over 8%, and after-hours Slack’s earnings failed to excited and its equity is being sold off. In short, if you were looking for a silver lining, there isn’t one today. (Unless you shorted oil a month ago.)