Over $2.9 trillion lost in the stock market due to fears of a global recession
The stock market took a major hit last week with $2.9 trillion dollars being wiped from stocks in the early trading hours of August 2nd. Not only was the USA hit, outside markets were hit as well such as Japan. Global recessionary concerns have in the United States have fueled massive sell offs of stocks. The sharp sell-off marks the worst day since the 2020 COVID-19 crash.
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Biggest Market Losers
The heat map paints an awful picture of what happened, with deep red dominating most sectors. Technology stocks such as Microsoft (MSFT) and Nvidia (NVDA), have plunged by over 2% and 5%. Communications giants such as Alphabet (GOOG) and META Platforms (META) saw a significant reduction in price, falling by 2.7% and 3.3%.
Consumer stocks suffered as well, with Amazon (AMZN) taking a major hit, dropping 11%! Elon Musk’s Tesla (TSLA) was not spared either, His company saw a decline of 1.92%. Financials saw a loss of 1.84% and 1.45% by JPMorgan (JPM) & Berkshire Hathaway (BRK-A).
A sector that is usually seen as safe, also took a hit. Healthcare stocks such as Eli Lilly (LLY) falling by 4.14%. However, some companies remained positive, such Novo Nordisk (NVO) with a gain of 3.23%
Mounting Recession Worries
The sell-off was further heightened by the movement in what is called the “Magnificent 7” tech giants. The companies that make up this list are Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta and Tesla. These companies have collectively saw a swing of over $3 trillion in market value over the last three weeks. This swing, raised more concerns about the possibility of an economic recession.
These concerns affected outside investors such as Europe and Asia. Notably, there are overarching concerns that the US might be sliding toward a recession, spurring a global sell-off that intensified after a poor employment report revealed a rapidly cooling jobs market, driving up the unemployment rate. The economy added 114,000 workers last month, falling well short of economist expectations of 185,000 jobs.
What is Next?
The market as of August 6th seems to be correcting itself with investors being able to recoup their losses. Investors took advantage of the massive sell off to buy and add to their current positions or create new ones. As Warren Buffett said, “…to be fearful when others are greedy and to be greedy only when others are fearful.” I live by this and when I see red or dips I purchase more stocks. Remain steadfast with your investment strategy and continue to add instead of sell. The market will continue to correct itself as the days move forward.
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