The decade-long bull market in stocks is over. And it was Trump’s Oval Office speech that put the nail in the Dow Jones coffin.
Unable to calm investors, or indeed the nation, Wall Street went into a blind panic. Stock market trading was halted on Thursday morning after a 7% plunge in the S&P 500 triggered a 15-minute “circuit breaker” for the second time this week.
The stock market is now at risk of wiping out all the gains since Trump took office. On Trump’s inauguration day, the Dow Jones was at 19,827. A further fall of 15%, as predicted by Goldman Sachs, would take us right back there.
The Dow Jones Industrial Average (DJIA) was wiped out on Thursday as stocks slammed into the first of three circuit breakers.
Circuit breakers are designed to give the market time to cool off when price swings get too volatile. They halt trading on the New York Stock Exchange (NYSE) when the S&P 500 hits predetermined levels.
Here are the levels to watch before trading is halted again or canceled today.
There is one caveat. The circuit breakers only kick in if the S&P 500 hits these levels before 3:25 pm ET.
If the plunge accelerates past these marks after that time, there is no safety net until the closing bell.
Goldman Sachs’ top U.S. equity strategist David Kostin thinks there’s plenty of pain yet to come. He sees the U.S. stock market falling another 15% before finding a bottom. Kostin said the coronavirus will hit all aspects of the economy.
Both the real economy and the financial economy are exhibiting acute signs of stress… Supply chains have been disrupted and final demand has declined for many industries. Travel is contracting sharply as both individuals and businesses restrict movement. Airlines, hotels, cruises, and casinos report plunging demand, lower occupancy, and cancellations. Employees are being furloughed.
A 15% decline from yesterday’s Dow Jones close takes us back to 20,000. A whisker higher than when Trump took office.
The president has consistently used the stock market as a barometer of his success. In November 2019 he boasted of record highs for the S&P 500 and Nasdaq.
In December 2019, he proudly tweeted a CNBC article, quoting:
Trump stock market rally is far outpacing past US presidents.
The president’s handling of the economy has been broadly applauded by the American public. But as the Dow Jones enters a bear market, Trump’s success, and re-election, is called into question.
The latest stock market selloff was triggered by Trump’s Oval Office address on Wednesday night. His decision to ban travel from Europe failed to calm nerves and sent the stock market into a tailspin in after-hours trading.
After consulting with our top government health professionals I have decided to take several strong but necessary actions to protect the health and well-being of all Americans. To keep new cases from entering our shores, we will be suspending all travel from Europe to the United States for the next 30 days.
Investors were hoping for a larger stimulus package from the White House. But they were left disappointed. European stocks plunged 6% this morning. Unsurprisingly, travel stocks took the heaviest beating.
This article was edited by Samburaj Das for CCN.com. If you see a breach of our Code of Ethics or Rights and Duties of the Editor, or find a factual, spelling, or grammar error, please contact us and we will look at it as soon as possible.
Last modified: March 12, 2020 1:55 PM UTC