Jerome Powell issued a dire warning about the U.S. economy on Wednesday. Here's how the stock market reacted.
Today’s 517-point drop looks like an omen: the stock market is crashing. After the stock market got “One Hell of a Wakeup Call” on Monday, Jerome Powell just stomped its head into the ground. At one point during the day, the Dow took a hellish fall into an ominous 666-point-deep pit:
The Dow Jones Industrial Average saw its losses deepen Wednesday afternoon, with the blue-chip index’s decline putting in on track to mark its worst day since April 1, according to FactSet data. The Dow … was off 666 points … at its nadir,
The stock market’s 2% plunge on Tuesday was already …
… a hell of a wake up call for investors and shows how much volatility is still lying underneath the stock market.
The market fell on Tuesday because investors grew concerned about the nation’s partial reopening for business as new incidents began to climb again in New York.
Dr. Fauci added to those concerns with his quarantined testimony to the Senate on Tuesday:
Two of the federal government’s top health officials painted a grim picture of the months ahead on Tuesday… Dr. Anthony S. Fauci, the nation’s top infectious disease expert, and Dr. Robert R. Redfield, the director of the Centers for Disease Control and Prevention — predicted dire consequences if the nation reopened its economy too soon.
Powell added official gravity to those concerns on Wednesday with some intimidating words for investors about the economy:
Powell said on Wednesday that the U.S. economic outlook was “both highly uncertain and subject to significant downside risks…. The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II,” Powell said.
The Fed chief’s economic warning sent the stock market crashing another 2% (517 points) when it closed for the day. That’s a total plunge of almost 1,000 points on the Dow in two days.
Scott Minerd, Global Chief Investment Officer of Guggenheim Partners, says the stock market’s bear rally has now topped out. He just asked if the market got sent back to the Great Depression era.
President Trump was not happy with these “rich guys” talking his stock market down, so he tweeted out his own rich stream of retorts:
This tells you just how fragile the president believes the stock market is. The rich guys only make money on shorts by causing the stock market to crash. Donald Trump has a better chance of staying in office, on the other hand, if he can talk a falling market back up.
Disclaimer: This article reflects the author’s opinion and should not be considered investment advice from CCN.com.
Last modified: September 23, 2020 1:56 PM