And the NASDAQ even hit its all-time high level of 10,131.
Today, not so much.
The DJIA finished down 2.7%.
The S&P 500 finished down 2.6%.
And the NASDAQ finished down 2.2%.
Why did these indexes drop so much today?
Because of increasing fears over the spike in new coronavirus cases worldwide.
From about early April to mid-May new coronavirus stabilized and even began falling slightly after a huge upswing in mid to late March.
Then new cases began spiking again in the US and worldwide the week of June 10th.
And these increases haven’t slowed down since then.
On June 11th total coronavirus cases worldwide were 7.4 million. Now 13 days later we’re up to 9.4 million as of this writing mid-day on June 24th. This is an increase of new cases of 27% in only 13 days.
Florida broke a record yesterday for new daily cases in the state.
And worldwide Brazil, India, Russia, and Mexico are all seeing large daily increases in new cases.
On June 11th I showed you the following chart that showed the large increase in coronavirus cases around the time.
But now new cases are accelerating.
Here’s this same chart with the only difference of adding the days from June 11th until today.
The arrow above shows the approximate spike in cases around June 11th. Pay attention to the continued increase since then.
In recent days we’ve seen multiple all-time highs in new coronavirus cases reported worldwide.
And this will likely continue because people are tired of being in their houses after 4 months of this.
In the article from June 11th linked above, I also talked about how this was affecting things economically. If you want to read that for full context use the link above.
But here’s how I ended that article…
What does this mean to you?
We’ll see what The Fed and other government sources say in the coming weeks when they release updated GDP numbers. But as of now the Organization for Economic Cooperation and Development (OECD) projects US GDP to fall by 7.3% for this full year 2020.
This would be the largest yearly fall in GDP since 1946. The year after World War 2 ended and the economy slumped due to factories and manufacturing retooling their facilities back to producing goods instead of war materials.
If a second wave hits, now or in the Fall the OECD projects US GDP to fall by 8.5%. Again, the worst since 1946.
The only years worse in US history in terms of GDP contractions were in the following years.
• 1930 – GDP contracted by 8.5% – The Great Depression
• 1932 – GDP contracted by 12.9% – The Great Depression and all time US fall in GDP.
• 1946 – as mentioned above.
That’s it going back to 1929 when GDP started being recorded.
In other words, we’re already looking at a top 6 worst GDP contraction in US history. And this is if no second wave of the coronavirus happens.
If one does happen, we’re looking at a top 3 worst GDP contraction in US history.
And when GDP contracts, more businesses will go out of business. And more people will lose their jobs than the tens of millions who already have.
We need to stop worrying about the “second wave” while we’re still dealing with the first one.
As of this writing we’re still waiting for the soon to be released official Federal Reserve numbers for the 2nd quarter.
But it’s going to be historically bad.
After a brief respite in late April to Mid-May where things looked like they were getting better and people thinking we could get back to normal… We’re now seeing more closures again in the states seeing the largest daily increases in news coronavirus cases.