By Zeru Peter Li
On March 9th, 2020, the Dow fell more than 2000 points by the time the market closed; with the S&P index dropping almost 8%. This is the worst day for the stock market since the 2008 Financial crisis. Natural resources genre stocks like Exxon Mobil, BP, and Royal Dutch Shell fell over 20%, which was a staggering number.
The crash started with the massive sell-offs in the morning triggering a circuit breaker in just 4 minutes after the stock market opened. There are three levels of circuit breakers implemented in the US stock market system. When the market falls more than 7%, trading would halt for 15 minutes. When the market falls 13%, trading would halt again for 15 minutes. If the market falls over 20% in a single day, then the market gets halted and remains shut for the rest of the day. The market triggered the level 1 market circuit breaker on Monday.
A lot of these massive shares sell-offs correlate to the fear of the Global COVID-19 Pandemic. By Monday, there are a total of 114,381 people globally infected with COVID-19, with over 4000 deaths globally. Another anxiety that triggered the market crash on Monday is the massive drop in Crude Oil price for April announced by Saudi Arabia, after demand in crude oil significantly decreased due to Social-Distancing measures taking place around the world. Investment Banking companies like Goldman Sachs predict that the market would not recover in a short period of time. Some firms even predict that we are not far from a Bear Market.