Sometimes, history always has some ironic coincidences!
11 years ago, on March 9, the U.S. stock market began the longest bull market in history, and now, this bull market anniversary is turning into a stock market disaster day worthy of being recorded in history!
The financial market is going through a "roller coaster" this week. After " Black Monday ", it made a big comeback on Tuesday, but suffered another heavy setback on Wednesday. U.S. stocks plummeted on Wednesday, with the Dow Jones Industrial Average plunging more than 1,460 points and falling directly into a technical bear market after a "one-night bungee jump."
Many Chinese and foreign institutions believe that the 11-year bull market in the U.S. stock market may come to an end, and the bungee jump of the U.S. stock market has not yet ended!
U.S. stocks suffered another heavy setback, and the Dow fell into a technical bear market.
On Wednesday (March 11), U.S. stocks opened lower and moved lower, and suffered another heavy setback. The Dow Jones Industrial Average plunged 1,464.94 points, entering a technical bear market.
As of the close, the Dow fell 1464.94 points, or 5.86%, to 23553.22 points; the Nasdaq fell 392.20 points, or 4.70%, to 7952.05 points; the S&P 500 index fell 140.85 points, or 4.89%, to 2741.38 points.
Large technology stocks fell across the board, Apple fell 3.47%, Amazon fell 3.75%, Netflix fell 3.9%, Google fell 5.04%, Facebook fell 4.46%, Microsoft fell 4.53%.
Financial stocks generally fell, JPMorgan Chase fell 4.72%, Goldman Sachs fell 6.78%, Citigroup fell 8.62%, Morgan Stanley fell 6.71%, Bank of America fell 4.02%.
Energy stocks fell, with Exxon Mobil falling 3.29%, Chevron falling 2.21%, ConocoPhillips falling 6.65%, Schlumberger falling 4.45%, and EOG Energy falling 6.44%.
Most popular Chinese concept stocks also closed down. Alibaba fell 3.74%, Jingdong fell 0.65%, Baidu fell 3.27%, Xinerfu fell 42.22%, Wanda Sports fell 13.62%, and Weibo fell 4.88%. , Pinduoduo fell 6.98%, and NIO fell 5%.
Goldman Sachs: The bull market in U.S. stocks is about to end
Investors generally expect that the 11-year bull market in U.S. stocks is coming to an end.
Goldman Sachs said: "We believe that the bull market of the S&P 500 Index will end soon. The target point for the S&P 500 Index in the middle of this year is 2450 points, which is 15% lower than yesterday's closing price and 28% lower than the previous high. %."
At the same time, Robert Shiller, the Nobel Prize winner in economics and the economist who first proposed the concept of "irrational exuberance", also warned that the market collapse is far from over, " panic is the beginning. Just started ”, global stock markets and economies are currently extremely fragile.
He worries that a recession is likely, that the epidemic is disrupting business activity and investment willingness, and that "the epidemic of phobias based on factual descriptions are not necessarily in sync with scientific reality, but are often impressive, which is good for the stock market." Very dangerous.”
Why do U.S. stocks continue to fall and have not yet bottomed out?
As of March 11, the Dow Jones Industrial Average has fallen by 17.47% since 2020, a cumulative decline of 20% compared with its highest point on February 12. The Dow Jones Industrial Average has entered a technical bear market. Why has the US stock market not yet bottomed out?
Dow Jones Index trend chart
According to US media reports, the performance of the stock market that day shows that investors believe that the US government has not taken enough measures to deal with the impact of the new coronavirus pneumonia epidemic, whether it is the epidemic itself or the impact of the epidemic on the economy.
According to CNN (CNN) reported on the 11th, according to statistics from the US Centers for Disease Control and Prevention, state and local health agencies, the number of confirmed cases of new coronary pneumonia in the United States has reached 1,162, and 37 people have died.
On the 11th local time, Washington, DC issued a statement declaring a state of emergency. So far, 23 states including New York, Washington, Massachusetts, and Washington, D.C., have declared a state of emergency.
Director-General of the World Health Organization Tedros Adhanom Ghebreyesus said on the 11th that the new coronavirus pneumonia epidemic has the characteristics of a pandemic. CNN reported that U.S. Senate Democratic leader Chuck Schumer is preparing to ask President Trump to issue a national emergency declaration regarding the new coronavirus epidemic.
Analysts said that it is now impossible to predict the duration and spread of the new coronavirus epidemic, and the resulting uncertainty will continue to bring turmoil to the financial market.
Institutions: The probability of a new round of financial crisis is not high
Regarding the current epidemic, CITIC Securities believes that the probability of a new round of financial crisis in the world is currently not high.
The financial crisis in 2008 was caused by "subprime loans" within the financial system, which triggered a rapid tightening of short-term inter-bank liquidity, which in turn triggered a chain reaction.
The weak recovery of the global economy has encountered the black swan of the epidemic, but there is no need to be overly pessimistic about the U.S. economy. Global developed markets are in an environment where endogenous growth is slowing down, structural contradictions are prominent, policy space is narrow, and financial markets are fragile.
In this case, the impact of a black swan event is more likely to be amplified. The impact of the epidemic on the global economy and financial markets will not be limited to the short term. The continued fermentation of risk aversion has caused U.S. bond interest rates to continue to hit record lows.
But there is no need to be overly pessimistic about the U.S. economy. Recently released data have shown the resilience of the U.S. economy. As long as the epidemic does not get out of control in the United States, even if the decline in global demand puts a certain drag on the U.S. economy, its impact will be controllable.
At present, the market is mainly concerned about the impact of the epidemic on the global economy. At the same time, the "crude oil price war" launched by Saudi Arabia has intensified the market panic to a certain extent, although the market has already moved towards an extreme risk-averse trading mode (in On the basis of the Federal Reserve's early interest rate cut of 50bp, the market still expects that the March interest rate meeting will cut interest rates by another 75bp or even 100bp. The expectations under this crisis scenario are already close to the 2008 financial crisis), but from the perspective of the main factors and transmission logic, currently Still not enough to trigger a new round of global financial crisis.
Chuancai Securities pointed out that overall, the domestic market is more attractive than other major overseas markets, and structural characteristics will gradually emerge. The judgment of the global economic crisis is that the crisis has already emerged, and how to get out of the crisis and overcome it is a problem that everyone, including China, needs to face. The capital market is often forewarned. From this perspective, future market trends still require continued attention.
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