COVID impact on the NASDAQ – March 2020 until June 2021 trends
After over a year, covid spread is regarded as the global pandemic. We have seen lockdowns multiple times in different countries. Covid-19 is still here and not going anywhere. People have to keep up with covid and live along with the global pandemic for a few more years. Global pandemic has a long-lasting impact on stock marketing and the economy in general. Covid impact on the Nasdaq was bigger than we expected.
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Covid impact on the Nasdaq after the historical peak
February 19 of 2020 was the peak of the stock market. Nasdaq closed the day with the historical record high. Apple stock and technology shares in general contributed the most to the historical peak. In two weeks after the record high, the pandemic started and the rest is history. Everyone was looking at the covid spread in Italy and China by that time, so the peak of the stock market lasted only for 24 hours. On 20th February, oil prices dropped and then it continued with the prices of tech companies stocks. The first was Apple stock that dropped a little and it was visible that covid case would have a big impact on the market. Experts could not believe back then that we were close to the stock market crash of 2020. Cvoid impact on the Nasdaq could be predicted but not on that level.
Watch a very interesting video explanation with official graphs of Nasdaq's historical peak.
March 2020 – stock market crash feels real
The real stock market crash started in the first week of March. It was obvious that covid impact on the Nasdaq was very real. Yet, in the United States there were some experts saying that the market would not have big influence from the covid. The World Health Organization mentioned the term ‘global pandemic’ and the world went crazy. The selling of the shares intensified in the second week of March. At that moment everyone knew that a market crash was in progress.
Yahoo's Finance has interesting coverage about "new black Monday" since 1987.
First Black Monday happened March 9. Stock market got 8% de-valuation. In just three days Black Thursday happened with 10% market loss. Black Monday II was the biggest downhill in the last few decades. Donald Trump addressed the public on March 11. The president of the US said that there would be a big travel ban. The USA closed the borders for everyone. Travel ban from the USA led to the crash of Nasdaq. Today we know this biggest crash by the name of “Black Monday II”.
Subsequent recovery
The biggest movement for economic stability started from Taiwan. The central bank of Taiwan was the first to announce aid for businesses. In their report, we read that the Bank of Taiwan would give $6.6 billion to small and medium businesses. Bank of Korea announced a $12 billion package. In that way Bank of Korea would conduct a $12 billion U.S. dollar-funding operation at auctions to South Korean banks. That was the start of the big movement to help the economy to recover. Recovering the economy is not easy, especially after intensified selling of shares from investors.
Market analysts has a very interesting prediction about the recovery of the stock market
Stock market recovery in 2021
As of now, the stock market is at the turning point. The economic growth in the USA is the reason why the stock market is reaching new heights. Investors see the opportunity that stock market can reach the heights of the pre-pandemic period.
Current situation of the US stock market
The crash of the market happens when the prices of the shares fall suddenly. This catastrophic event happened in March 2020. Currently the US stock market is slowly getting back to old condition. Forbes published an interesting report in May of 2021. Their data suggests that earnings per share of more than 90% of the S&P 500 companies. Earnings per share increased by 46% on a year on year basis which is more than expected. Market experts have big trust in tech companies. Experts believe that the share price of Amazon and Google will increase. Google and Amazon are set to score a record 4th quarter in 2021. That would be a big boost for the share prices. Other big expectations are towards JP Morgan and Morgan Stanley. Second quarter of 2021 was very strong. Stock market will continue gradually increasing in the next two quarters of the year.