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Dow Jones Plummets as Stocks Bleed Toward Worst Month in 90 Years

Last Updated September 23, 2020 1:40 PM
Ben Brown
Last Updated September 23, 2020 1:40 PM
  • The Dow Jones Industrial Average (DJIA) fell on Monday as the stock market extended its month-long plunge.
  • The Dow’s 26% fall in March so far is now the second-worst month on record, beaten only by a 30% drop during the Great Depression in 1932.
  • Democrats blocked the Trump administration’s rescue package last night, adding more pain to the stock market.

The Dow Jones is veering towards yet another disastrous milestone as the stock market sell-off continues on Monday. The index has fallen more than 26% in March, putting it on track for the worst month in almost 90 years.

Only one month in history saw bigger losses: September 1931, during the Great Recession, when the Dow fell 30% .

The bad news is, there are still seven trading sessions left in the month.

Dow jones DJIA stock market chart
If the Dow Jones is below this red line at the end of March, it will mark the worst month in history for the U.S. stock market. Source: TradingView / CCN.com annotation

Dow slides below 19,000

Dow Jones Industrial Average (DJIA) futures  hit ‘limit down’ circuit breakers within minutes of opening on Sunday night.

Things recovered overnight after the Federal Reserve announced unlimited asset purchases , but the stock market still opened to losses on Monday.

dow jones chart, stock market today
The Dow Jones Industrial Average (DJIA) fell below 19,000 on Monday. | Source: Yahoo Finance

The Dow Jones fell 251.89 points or 1.31% to 18,922.09.

The S&P 500 dropped 1.08%, while the Nasdaq clung to narrow gains of 0.16% as of 9:58 am ET.

Stock markets still nervous

Despite one of the worst months in history, the stock market selloff shows no sign of letting up. In Europe on Monday, stocks retreated to seven-year lows  as the STOXX 600 plunged a further 4.6%.

The financial bloodbath is its own pandemic, impacting markets around the world. | Source: AP Photo/Michael Probst

Senior analyst at Oanda Edward Moya thinks there’s more pain to come.

Risk aversion appears here to stay as investors become more fearful that this could be the worst global recession during peacetime… Volatility was supposed to start to calm down as central banks unleashed … liquidity programmes and stimulus, but coronavirus updates in Europe and the U.S. continue to suggest we are nowhere near being out of the woods.

Democrats block coronavirus stimulus package

The Federal Reserve has already unloaded every monetary policy in its barrel. Now all eyes are on Congress for a fiscal response. But the Trump Administration’s $2 trillion rescue package was blocked by Democrats last night.

Speaker of the House of Representatives Nancy Pelosi said Democrats would write their own bill in response . Many have criticised her decision for playing politics  in a national crisis. Mark Levin said it was ‘sickening’.

People are sick and dying and Pelosi is playing games. Apparently the TRILLIONS the Republicans want to spend isn’t enough. Sickening.

The financial markets are unlikely to find any relief until Congress passes the stimulus package.

Dow Jones: brace for 9 months of pain?

Hopes for a quick recovery in the coronavirus pandemic were also dashed by New York governor Andrew Cuomo last night.

New York Governor Andrew Cuomo has warned residents to brace for a rough 2020. | Source : Spencer Platt/Getty Images/AFP

He told New Yorkers to expect up to nine months of social distancing measures. He added that 80% of the state could become infected before this is over .

This is not a short-term situation. This is not a long weekend. This is not a week. The timeline, nobody can tell you, it depends on how we handle it, but between 40 and 80 percent of the population will wind up getting this virus.

If he’s right, the damage to the economy may be much larger than the Dow Jones is currently pricing in. The financial capital of the world is about to overtake Italy in terms of infections per capita.

Is the stock market ready for -50% GDP?

We’ll begin to know more when the hard data comes in. GDP and unemployment numbers will give us a glimpse into the true impact on the U.S. economy.

The early signs don’t look good. Last night, Fed President James Bullard warned investors to expect a 50% drop in GDP and as much as 30% of the American population unemployed.