It has happened again. On Thursday the Dow Jones Industrial Average fell 2,352 points, which was the largest single day stock market point crash in history. Of course the old record only lasted for three days, because on Monday the Dow dropped 2,013 points. And on Wednesday, we actually witnessed the third largest single day stock market point crash in history. So the three worst days in the history of the U.S. stock market (on a point basis) have all happened this week. On a percentage basis, the stunning decline that we witnessed on Thursday was the worst day for the Dow since the horrifying market crash of 1987. Wall Street is in a tremendous state of panic right now, and nobody is quite sure when this will end.
Needless to say, this frenzy of selling is being driven by fear of the coronavirus…
“The coronavirus is scary and people don’t know what to expect,” said Kathy Entwistle, senior vice president of wealth management at UBS. “It’s like the tsunami is coming. We know it’s going to hit any day and nobody knows what the outcome is going to be.”
In the last 48 hours, the NBA, the NHL, Major League Baseball and Major League Soccer have all suspended their seasons because of COVID-19. Public gatherings of all sorts are being canceled or postponed all across America, and we are seeing “panic buying” at major retailers like Costco that is absolutely unprecedented.
But we still don’t know if this is going to evolve into a major pandemic that is going to kill millions of people. Right now there are less than 1,400 confirmed cases in the U.S. and less than 100 deaths.
If we are witnessing this much panic now, what will happen if millions of people do actually start dying?
Stocks should not be falling this rapidly yet, but of course they should have never gotten so high in the first place.
And even after all the carnage that we have already witnessed, stocks are still extremely overvalued.
In order for stock valuation ratios to return to their long-term averages, we would need to see the market fall another 20 to 30 percent.
But if this coronavirus pandemic does eventually become what many are fearing, stock prices will eventually go way below their long-term averages.
These are very strange times, and I have a feeling that they are about to get a whole lot stranger.
About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.
The post We Just Witnessed The Largest Single Day Stock Market Point Crash In History (Again) appeared first on The Economic Collapse.
Michael Snyder is the publisher of The Economic Collapse Blog, The American Dream Blog and The Truth. You can follow him on Twitter right here.
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