Free Fall

By Isaac Cohen*

After last Monday’s dive of almost 3,000 points, or 12.9 percent, the Dow Jones Industrial Average suffered its worst day since the crash of October 19, 1987. Thus, the corona virus has brought to an end the longest bull market in Wall Street’s history, which started on March 9, 2009.

After losing more than 20 percent on March 11, followed by a loss of almost 13 percent last Monday, the Dow closed at 20,188 points, from its most recent record of 29,551, reached on February 12. The losses in market value, last week, reached $5.32 trillion.

Other consequences of the economic slowdown caused by the virus also contributed to the stock market crash. Investors were already anxious about the spread of the virus when, on the weekend of March 6-7, the news broke out that Saudi Arabia and Russia were unable to agree on production cuts to counter the fall in demand from China, which pushed down the price of oil to around $40 per barrel. The following Monday 9, the markets opened falling 7 percent, which activated the circuit breaker temporarily halting trading. The week ended with the Dow climbing 9,4 percent that did not last, despite the cut of 1 percent in interest rates and a $750 billion asset purchase program, announced last Sunday by the central bank.

Last Monday, in an unusually realistic statement, President Donald Trump said the worst of the virus outbreak could last until August and that there “may be “ a recession, which means that the virus also threatens to put an end to the longest economic expansion in US history.

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, TELEMUNDO and UNVISION and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email: ramonjimenez169@gmail.com

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