Investors are bracing for an incredibly ugly and volatile day on Wall Street today as China closed to their own version of a “Black Monday” and the Dow dived over 900 points at the opening bell. Oil Prices plunged below $40 a barrel. At this moment we are down 6% and have lost 1000 points on the DOW.
Experts agree that the market in China, the uncertainty on the interest rate and the effect of cheap oil are causing this slide. Many are stating that there must be something more happening to cause this type of market descent.
China’s market last dropped this low in 2007. And is down more than 40% in the last two weeks. This is being called a Market Crash by most of the financial community.
The stock markets fell more than one percent under pressures from low oil prices and the uncertainly from the Federal Reserve over the raising of interest rates.
The Dow Jones Industrial Average (DJIA) was over 300 points lower Thursday after a 163 point drop on Wednesday. The pace means the DJIA will have its worst day since losing 350 points on June 29th.
Markets around the world were impacted as well.
Japan’s Nikkei 225 falling 0.9%, the Hang Seng index in Hong Hong off 1.8%, the Shanghai composite in mainland China down 3.4%, Germany’s DAX off 2.3% and the CAC 40 in Paris off 2.1%.
“I think the oil and the geopolitical problems are the real problems for the market because we’re looking at lower global economic growth, and lower global growth is going to weigh on the U.S. as well,” Peter Cardillo, chief market economist at Rockwell Global Capital, told CNBC.
Some analysts, however, say that the movement by China last week to devalue the Yuan over two consecutive days is also impacting the market.
“There is heightened uncertainty that began with yuan devaluation last week, while overall China’s growth is slowing faster than thought. This is weighing on confidence,” Randy Frederick, managing director of trading & derivatives at Schwab Center for Financial Research, told CNBC.
(Update 8/20/1015 at 4:48PM CT: Since this story was originally reported the dow has dropped 2% and is currently at 358.04.)