|
Audio Version
Getting your Trinity Audio player ready...
|
The stock market was pummelled today. The Dow suffered its largest daily point loss ever, dropping over 2,000 points. A combination of sinking oil prices and fears over the spreading coronavirus contributed to the losses.
The coronavirus has been hurting the markets for weeks. The disease has now infected over 100,000 people worldwide and killed over 3,000. The virus is currently spreading in the US, hitting multiple states and infecting a few hundred.
The latest hit to the market came from the energy sector. OPEC and Russia failed to come to an agreement on production cuts. With the economy already on edge, failure to cut production is expected to lead to an oil glut. As a result, prices are crashing.
The carnage was so bad this morning that a “circuit breaker” failsafe was triggered that halted trading for 15 minutes. The halt in trading is designed to stop the bleeding during big drops in the market. Unfortunately, the free fall continued once trading began again.
While the coronavirus problem does not appear to be going away, there is hope that the oil market can correct itself. If OPEC and Russia come to an agreement in the coming days, oil prices are likely to rebound. This would, in turn, calm investors and set them on a buying spree.
Unfortunately, the stock market does not just affect those that buy stocks. Market turmoil has real-world consequences for everyday folks. Falling stock prices cause companies to lay off workers. Of course, if you own a 401k it is hurt by falling stock prices as well.