Why the Market Will Crash In the Next Days
October 26, 2020 by Douglas Johnson
Brace. We are entering a catastrophic few weeks that might change the world as we know it.
WINTER IS COMING
Today is October 26, 2020. Winter is coming, as the author wrote, and it means that people will spend more time inside, more easily transmitting the COVID-19 virus to others. In many countries around the globe, the situation is starting to become out of hands, once again. The scenario of March is being rewritten and, this time, it could be worse, as countries are reluctant to once again push the nuclear button of shutdowns, delaying as much as possible the moment they will be forced to stop an economy that is already mostly surviving thanks to the many stimulus plans.
AN ELECTION IS ENDING
Meanwhile, Republican President Donald J. Trump and former Democratic Vice President Joe Biden are in the final days of a vicious campaign that will define the way the COVID crisis is being managed – or unmanaged. There are three possible scenarios:
1. Trump loses and accepts the results.
2. Trump wins.
3. Trump loses and contests the outcome of the election.
In that third scenario, the United States would then add a democratic crisis on top of an ecological, economical and health crisis.
Finally, the Christmas season will soon kick in, meaning more people in stores all around the world and many family reunions, whether the government agrees or not.
A NEW COLLAPSE
Therefore, all the elements seem to be in place for a market collapse. The financial markets could simply go the same route as in March, when the S&P 500 took a quick dive of around 30%, taking the crypto market along with it. What we learned from that crash is a confirmation that markets tank in an extremely fast pace, hitting circuit breakers; but that the follow-up recovery is almost as fast.