Today could be the day
With the U.S. stock market having steadily dropped over the past month and now finding itself down more than twenty percent, we keep waiting to see if there ends up being a single day where it truly goes off a cliff. It’s become volatile and unstable to the point that last week it dropped two thousand points in a day, then gained it all back the next day. But today we’re looking some uniquely bad news.
Last night the Fed cut interest rates to essentially zero. It’s the regretful yet responsible kind of move you make when you know you’re going into economic contraction anyway, and you’re just trying to minimize the size of the recession. The trouble is, it’s a final signal to Wall Street that the roaring Obama economy is now 100% over and isn’t magically bouncing back. This comes even as major cities announce shutdowns of all restaurants and bars, which will further flatten economic output.
Accordingly, investors sold off so heavily last night in overnight trading, it triggered yet another automatic circuit breaker, for the third time in a week. This means that when the Dow Jones opens in the morning, it’ll likely have to be immediately halted due to the corresponding selloff. By the time the market reopens after the halt, we’ll get a sense of just how sour of a mood investors are truly in, but it’s unlikely to be pretty.
Again, the market is too unstable at this point to be predictable. But investors have clearly decided that their bounce back on Friday afternoon, triggered by Trump’s ridiculous press conference full of what turned out to be lies, wasn’t worth the effort. Now we wait to see if today is the day the market truly falls to pieces, or if there’s any remaining stability left in it. The stock market was one of the few bragging points that Trump was planning to use in his 2020 campaign, and now that’s gone.
