Everyone out there is saying that the market cannot fall any more but most of the legendry investors in the world are still afraid that the market might tank further.
All over the world, economies are collapsing because most of the economic activities have been paused as a result of the prevailing threat to the public health. Thousands of companies all over the United States have been forced to close. Without any economic output, their share prices has plummeted and at the moment some of the companies have lost half of their value. This economic collapse is what has contributed to the collapse of the stock market because basically the entire economy has come to a standstill. Many companies and businesses are laying off millions of workers every week, the unemployment numbers have hit record highs. The whole US economy is basically dysfunctional and as a result the entire stock market has tumbling for the last one month. Supply chains have been disrupted and this is crippling the entire global economy. This economic disruption is the main contributor to the collapse of the markets and this means that the stock market is more likely to continue collapsing until when the global economy will stabilize. Just like it is in the US, the Euro Zone is also going through an economic turmoil because in most countries, their economies are still closed. All over the world, economies are in a downturn and the stock market crash will continue.
Banks are facing a credit crunch and they are stretched because of financial demands that are increasing exponentially. Liquidity has become a big challenge and the financial system is struggling to coup up with this. Investors have nowhere to hide and in this crisis everyone is losing. Most of the Americans have invested in the stock market and at the moment their portfolio is down by about 30 percent. Despite this magnitude of market crash and economic collapse, we have many factors that are pointing out that this crisis will continue. Most investors are still afraid that the market will continue tumbling and some of the legendry investors feel that we have not yet hit the bottom.
It is very clear that this economic collapse is many times bigger than the 2008 global financial crisis. The 2020 crash will is becoming one of the biggest market crashes in history; in just weeks the market has wiped gains that have been made for many years and trillions of dollars have been lost. Experts are warning that the full extent of economic damage is yet to be reflected in the markets and this means that we might have another downside move in days to come especially if the economy will not open up.
Recently, Goldman Sachs conducted a survey where many institutional investors were involved. Out of all those who were interviewed, 50 percent of the investors believe that the stock market has not yet hit the bottom and we have a room for more downside movement. In this survey, Goldman Sachs interviewed 1,800 investors and three-quarters of them still believe that the stock market is still in a bear territory. They believe that the recent bounce of the S&P 500 to the bull territory is a very short term market correction and very soon the market selloff will continue. Many of these investors are readjusting their portfolios to capitalize on another wave of market decline and at the moment many investors are dumping corporate bonds and they are jumping into the stock market. This is in confluence with another group of economists who had earlier pointed out that the market can crash by up to 40 percent. Things will become worse before we see any signs of recovery in the markets. This crisis will become bigger and bigger as long as the US economy remains closed. Companies that have halted their operations are already losing billions of dollars in revenue. It will be difficult for most of the companies to recover even with the government’s stimulus package. If you want to invest in the stock market this might not be the right time because the market has not yet hit the bottom. This is the most dramatic market crash in recent history and without any doubt it will take years for the economy to fully recover. This is the economic collapse of the century and there is a possibility that things will get worse. There is more pain to come so you’d lather brace yourself for tough economic times ahead.
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