An analysis of the reasons for the collapse of US stocks
There are three main reasons for the collapse of US stocks: First, the US stocks themselves are near historical highs. Since 20 19, the number of US stocks has risen from 23,000 to 29,000, and a large number of profitable stocks have been accumulated. Second, the United States did not pay attention to the COVID-19 epidemic, and the non-disclosure of data led to concerns about US stocks, which were reflected in the entire US stock market. The third is that the Fed continues to issue policies to support the market. The scope and intensity of these policies are relatively large, which in turn has caused further panic.
At the end of 20 18, US stocks also fell to a certain extent, which was supported by policies at that time, so this year's decline was actually staged again at the end of 20 18. 20 18 at that time, there were many opinions advocating that the American economy was about to begin to decline and the domestic growth potential was insufficient. However, the subsequent interest rate cut by the Federal Reserve stabilized the entire American economy and lasted for more than a year. This year's COVID-19 has become the last straw to crush US stocks.
During the COVID-19 epidemic, the United States has been slow to release specific data such as the number of infected people, which makes market investors more suspicious. Especially in 20 19, nearly 20,000 people in the United States died of influenza. This data makes people wonder whether many COVID-19 patients are counted. Therefore, this series of opacity and unknowns further panicked market funds, and US stocks plummeted.
In addition, the recent Fed policy is fast and urgent, and it is also a series of large-scale combination punches. On the surface, these good news are intended to save the market, but in the context of the US stock market crash, it is like hitting the last shot in the arm, just like one person is dying, another person is not talking, and kindness brings some delicious food. In this regard, such psychological hints have exacerbated the sharp drop in US stocks.
To sum up, these are the main reasons for the sharp decline in US stocks.