02 December 2021

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The major collapses of the S & P500

Author: Luigi Campopiano

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Market peaks and dips have been (and will be) a persistent feature of the S & P500 (and equity markets in general) over time. However, the forces behind each rise and fall are often less clear. Take Covid: Despite lagging economic growth and historic unemployment levels, the S&P 500 has rebounded 47% in just five months, with an extraordinary turnaround.

The longest recovery on this list followed the devastation of Black Tuesday, while the shortest was Black Monday in 1987, where it took 19 months for the market to fully recover. The story offers many lessons and, in this case, a look at the post-coronavirus market recovery. While the stock market is likely catching up with Fed liquidity, investor optimism and the promise of potential vaccines, it is interesting to note that the trajectory of this crash somewhat resembles the initial rebound shown during the Great Depression, which means that we may not be. still out of the woods. Could the market experience an accelerated recovery or is it a prolonged decline in cards?