The economy is heading down the toilet. Graphs of the markets falling off cliffs are scary. Experts are talking about the 1987 crash. But before you start stress eating chocolate, here’s what you need to know about what’s happening on Wall Street, in Washington, D.C., and beyond.
Should I just stuff my money in a mattress?
At this point, what’s happening to the markets is a wait-and-see game. As of late this morning, the Dow Jones Industrial Average was down about 740 points, or 2.7%. The Nasdaq Composite Index declined over 333 points, or 2.91%, and the S&P 500 was looking at a 90-plus point drop, or 2.66%.
Why is this happening?
COVID-19 cases are on the rise, so there are fears about what this next wave of the pandemic will do to the economy. The latest data shows more than 74,000 new cases in the United States, with the country’s total now at almost 8.8. million. According to the Johns Hopkins University School of Medicine, an estimated 226,700 people have died from the virus since the first case was reported on January 21.
What about the federal stimulus package?
Republicans and Democrats were unable to reach an agreement. Now the U.S. Senate is adjourned until after Election Day, so there will be no immediate relief. The pols return on November 9. The lack of a deal is not helping matters.
And the election?
Same deal. Market volatility tends to increase with uncertainty, and we’re now less than a week away from a presidential election that may not produce a clear winner right away.
BTW, what’s the deal with ’87?
Black Friday, as October 19, 1987, is known, saw the Dow Jones Industrial Average plummet 22.6% in one day. That’s 508 points to you non-quants. To this day, that’s still the biggest single-day market decline ever by percentage.