What is Black Monday? | The Sun

IN OCTOBER 1987, the stock market crashed unexpectedly, causing economic instability around the world.

The sudden crash is now referred to as Black Monday and years later, it's trending again in the midst of more economic concern.

What is Black Monday?

Black Monday is the name given to the stock market crash on October 19, 1987.

At the time, 23 major world markets experienced a drastic decline.

When measured in USD, eight markets declined between 20 to 29 percent, while three declined between 30 to 39 percent – Malaysia, Mexico, and New Zealand.

In Hong Kong, Australia, and Singapore, the market declined by more than 40 percent.

Read More on The US Sun

Everything to know about the stock market today

Austria experienced the smallest decline, with a drop of 11.4 percent. Hong Kong was the most severe, their market dropping by 45.8 percent.

Worldwide losses at the time were estimated to be around $1.71trillion in USD.

Many believed Black Monday would launch a second Great Depression.

How did Black Monday affect the United States?

Between August 1982 and 1987, the Dow Jones Industrial Average had risen from 776 to 2,722.

most read in money

CRYPTO HALT

What is Celsius and why is it pausing crypto withdrawals?

ON BORROWED TIME

Five common BNPL mistakes could stop you borrowing in the future

DEBT BUSTERS

Six ways to shrink your debts from lightening loans to blitzing credit cards

SUN SAVERS

Five Father's Day presents that pack in big love for a small price

At the time, the average number of shares traded on the New York Stock Exchange rose from 32million to 181million shares.

Just days before Black Monday, the United States House Committee on Ways and Means introduced a tax bill meant to reduce the tax benefits associated with financing mergers and buyouts.

On Wednesday, October 14, 1987, the United States Department of Commerce announced high trade deficit figures had a negative impact on the value of the dollar, raising interest rates and lowering stock prices.

Dow Jones dropped by 95.46 points, dropping another 58 points the next day.

The Friday before Black Monday, Dow Jones fell by another 108.35 points.

When Monday came around and the stock market reopened, Dow Jones fell by 508 points.

This triggered crashes in futures exchanges and options markets and was the largest one-day percentage drop in the history of Dow Jones.

Of over 2,000 New York Stock Exchange stocks, 195 saw trading delays and halts throughout Black Monday.

Computers became overwhelmed with the total trading volume, delaying orders even more.

Why is Black Monday trending on Twitter?

On June 10, 2022, The Department of Labor released an inflation report for the month of May.

The DOL reported that the cost of goods and everyday living rose to the highest it's been in an estimated 40 years.

The Dow Jones Industrial Average, S&P 500, and NASDAQ 500 all saw a steep decline – which resulted in concerns regarding economic growth and another recession.

Days later on Monday, June 13, Black Monday began trending on Twitter.

One user tweeted: "THE BLACK MONDAY CRASH IS STARTING!!!"

A second user said: "Looks like it's gonna be a black Monday on the stock market today."

"Black Monday was an inevitability after Biden's installment," tweeted another.

What is the Dow Jones Industrial Average?

The Dow Jones Industrial Average, also known simply as Dow Jones, is a price-weighted measurement stock market index of 30 prominent companies within the stock exchanges of the United States.

Dow Jones was first calculated on May 26, 1896, by Charles Dow.

Read More On The Sun

I’m a cleaning expert – 3 things you MUST do to banish summer allergies

Charles was the co-founder of both The Wall Street Journal and Dow Jones & Company.

He worked with his business associate, Edward Jones, to establish the market measurement.

We pay for your stories!

Do you have a story for The US Sun team?

Email us at [email protected] or call 212 416 4552. Like us on Facebook at www.facebook.com/TheSunUS and follow us from our main Twitter account at @TheSunUS

    Source: Read Full Article