The day was good until the opening of the market. US traders will definitely remember this day until their death.
NOW, what was happen on that date?
Ok, let's start from scratch. To make understand the viewers
every country has its stock market & every stock market has it index like in India we heard about NIFTY, SENSEX, BANK NIFTY, etc.
Like that US has its stock market where it also has its index like NASDAQ, S&P500, DOW JONES, etc.
Now we all know that how continuously corona virus is spreading & for that China's export or we can say our import from china is completely band.
Now in this stage we all know that how much we are coverd with chiness product. & for this reason not only US market but also every countries market droped certainly. & it was normal.
But here the abnormal thing is most of the US index dropped ferosusly.
see the picture of DOW JONS
where march 19 it was 55k now it became & 23k. see picture below
forget about 19th march2019. come to 6 march 2020, even it show 25,457.21 & after 5 day in 12 march 2020 it shows 21,465.94 i.e 15.68% drop.
NASDAQ index droped by
NASDAQ index droped by 14.75 % in this 5 day span.
S&P 500 dropped by
S&P 500 dropped by 14.91 %
we can find drpooed percentage is almost same Why cause market beta is almost same close to 1.
Now why all person is worried about DOW JONES.
cause DOW JONES comprises of 30 stocks
|AXP American Express|
|DOW Dow Chemical|
|XOM Exxon Mobil|
|GS Goldman Sachs|
|HD Home Depot|
|JNJ Johnson & Johnson|
|JPM JPMorgan Chase|
|PG Procter & Gamble|
|TRV Travelers Companies Inc|
|UTX United Technologies|
which are the most valuable company in US & global market.
WHY SO drop?
Trump’s announcement of travel restrictions for most European countries added to concerns over disruptions to travel and trade, while the World Health Organization’s warning over “alarming levels of inaction” by governments in corralling the virus further raised the alarm.
“Markets reacted negatively to what was perceived as a solemn but confused speech that placed blame on other nations, omitted to focus on immediate actions to relieve the most affected individuals, and lacked in concrete fiscal and health measures to address the economic and financial impact of the virus,” Gregory Daco, chief U.S. economist at Oxford Economics, said in a note.
European markets were down 10%, even after the European Central Bank announced more stimulus measures. World markets are enduring violent swings amid uncertainty about how badly the outbreak will hit the economy.
Some economists questioned whether interest rate cuts from the Federal Reserve will be enough to ward off the economic impact from the virus that threatens to disrupt global supply chains.
central bank made an emergency rate cut last week, the first outside of a
regularly scheduled meeting since the global financial crisis. But it did
little to calm jittery investors, who are debating whether those methods can
still prod Americans that are fearful of contracting the virus to visit malls
Now the actual question is it abnormal drop or not?
Let compare with Indian DATA. See the SENSEX
SENSEX also dropped by 15% within this 5 day span
ok lets see NIFTY
surprisingly NIFTY also dropped by 15%.
So we found that this coronavirus hits all over the world with the same impact. whether it is US or INDIA or other countries.
so we can't run from it. NOW it is the duty of the investor not to panic every time.
prediction of the market:
after analyzing all this data it can be predicted that in 13th march,2020 market will up in the Asian side but it will deteriorate in the US market cause trump's announcement will definitely impact the market for long run. but in 3 to 4 days DOW JONES, SP500, NASDAQ index will be up by some point due to investors' activity of ( buy spot, sale future). & this will continue for some of the period , most of the people go for intra-day. so the index will be very volatile for some days. BUT I can say in the one-month market is going to see its very dark stage.