World Wide Stock Market Crash of 2015

While the bears are temporarily in control of the stock market, the bulls will eventually regain control. It is important not to panic. geralt / Pixabay

NOTE:  Markets ended higher for the week after a volatile few days. Details on this week’s stock market results have been added at the end of this article.

Stock markets around the world tumbled 3% to 8% in trading on Monday, August 24, 2015.  This followed a week in which markets had already fallen due to concerns about dropping oil prices, a weakening Chinese economy, and the possibility that the U.S. Federal reserve could raise interest rates in September.

At one point the Dow Jones Averages dropped more than a 1,000 points, or 6.5%.  Although they came back from that low, it has already been a very volatile day.

The Nasdaq and the S&P 500 are also down on early trading.

The volatile opening of this morning’s stock markets in the U.S. was not a surprise, after foreign markets tumbled overnight.  China’s Shanghai Composite fell 8.5%, which completely wiped out its gains for the year.

The Euro Stoxx fell 5.3% overnight.

Markets in Saudi Arabia and other countries also fell, over concerns about low international oil prices.  For example, U.S. crude prices are now down to approximately $39 a barrel.

There are widespread fears of a global economic slowdown, so consumers can expect the markets to remain temporarily volatile.  It could take months or years to fully recover from the stock market crash of 2015.

By the end of the day on August 24, 2015, the Dow Jones Industrial Index had dropped 588 points to 15,871.35, substantially below its 52 week high of 18,351.40.

However, experts insist that investors should not panic and remember that those who sold during the Great Recession lost approximately half the value in their retirement accounts.  Those who rode it out managed to recover everything they lost within three years, and most made a substantial profit above that.  While it can be difficult to remain patient during these times of volatility, that approach has historically benefited investors.

UPDATE: TUESDAY, APRIL 25

On Tuesday, April 25, the U.S. stock markets initially opened higher as buyers took advantage of the drop in prices to find “bargains.”  However, during the last hour that the markets were open in the U.S., prices began to slide again.

By the end of the day, the Dow Jones Industrial Averages had dropped another 204.91 points (or 1.29%), down to 15,666.44.  The S&P 500 had dropped 25.60 points (or 1.35%), down to 1,867.61.  The NASDAQ Composite had dropped 19.76 points (or 0.44%), down to 4,506.49.

UPDATE: WEDNESDAY, AUGUST 26

China lowered interest rates in their country in an attempt to stabilize the stock markets around the world.  However, in early trading the Asia markets were still struggling to maintain their equilibrium, due to fears that the rate cuts would not be enough to stabilize China’s slowing economy or prevent a stock market collapse.   The efforts of China to prevent a seventh day of falling stock markets seems to have worked.

The Dow Jones Industrial Averages rose 619.07 points (3.95%), the S&P 500 rose 72.90 points (3.9%), and the NASDAQ rose 191.05 (4.24%).  Tech stocks, especially Amazon, Google and Netflix, did especially well in trading today.

However, despite today’s rise in stock prices, the Dow Jones is still 2065.89 points below its 52 week high of 18,351.40, the S&P 500 is still 194.21 points below its 52 week high of 2,134.72 and the NASDAQ is still 534.40 points below its 52 week high of 5,231.94.

This indicates that it could take some time, possibly even months, for the prices of many stocks to rise to the pre-crash levels.  On the other hand, many analysts believed that the stock market values had gotten too high and we were due for a correction.

UPDATE: THURSDAY, AUGUST 27

The U.S. stock markets continued their dramatic climb, responding to China’s attempts to stabilize their markets. Many analysts also now believe that it is less likely that the Fed will raise interest rates in September, despite the fact that others are certain that interest rates will move higher soon. In addition, the markets were stimulated by a rebound in crude oil prices.

The Dow Jones Industrial Average rose an additional 369.56 points, adding to the previous day’s gain of 619.07 points. Combined, the market rose nearly 1000 points between the opening on Wednesday and the closing on Thursday.  The final result was that the Dow closed Thursday at 16,654.77. The S & P 500 ended the day at 1,987.66 and the NASDAQ closed at 4,812.71.

UPDATE: AUGUST 28, 2015

After a volatile week in the world wide stock markets, on Wednesday, Thursday and Friday the markets were able to completely recover from the dramatic losses on Monday and Tuesday.

The final closing prices for the week were:

Dow Jones Industrial Averages:  16,643.01 —  1,708.39 points below the 52 week high of 18,351.40

S & P 500:  1,988.87 — 145.85 points below the 52 week high of 2,134.72

NASDAQ:  4,828.32 — 403.62 points below the 52 week high of 5,231.94

Thanks to the mid-week recovery, these numbers are not nearly as bad as many analysts feared they would be at the beginning of the week.  In fact, at the end of the week equities were actually trading higher than they were at the beginning of the week … although they have still lost money this year.

If volatility continues in the Chinese markets and oil prices, and this is combined with an eventual interest rate hike by the Fed, we could experience another market slide later this year.

Sources:

Daily market prices according to Yahoo! Finance.

http://www.reuters.com/news

“Wall Street in Free-Fall as Traders Ditch Stocks Amid Global Rout”

“China’s Stock Market Suffers Biggest One-Day Fall Since 2007”


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