While the beginning of the week has been rocky as a consequence of rising COVID-19 instances globally, the actual blow got here on yesterday as Wall Road collapsed. The S&P 500 and the 30-stock Dow Jones hit their lowest ranges since late September, with the latter dropping greater than 943 factors in a day.
Among the many key indexes, the S&P 500, the Dow Jones, the Nasdaq and the Russell 2000 misplaced about 3.5%, 3.4%, 3.7% and three.0%, respectively, on Oct 28. Even the safe-haven steel gold was not spared because it shed about 1.8% on the day.
Why the Crash?
With winter approaching, COVID-19 instances are on the rise. Components of Europe introduced extra lockdowns and U.S. cities corresponding to Chicago, New York and New Jersey launched a brand new spherical of restrictive measures to struggle the unfold of the coronavirus.
COVID-19 infections are spreading throughout the US on the quickest clip for the reason that begin of the pandemic, based on the newest NBC Information figures. The 71,000 new instances per day that the US averaged over the previous week was the utmost in any seven-day interval this yr.
Throughout the pond, German Chancellor Angela Merkel introduced new lockdown measures on Wednesday, shutting eating places, bars, recreation facilities, swimming pools, and cinemas for one month, and restraining journey and huge occasions.
French President Emmanuel Macron introduced the second nationwide lockdown for not less than the entire of November. The strikes would observe comparable restrictions executed over the previous few weeks in Italy and Spain.
Aside from this, the US is prepping for presidential election on Nov 3.Wall Road’s worry gauge spiked to its highest stage since Jul 15 as a consequence of election uncertainty. There are talks {that a} winner won’t be declared the evening of Nov Three as a consequence of a postponement to rely the massive quantity of mail-in ballots.
Former Vice President Joe Biden has managed an 11-point lead over President Trump one week earlier than the election, however the CNBC All-America Financial Survey reveals the race may tighten, per CNBC. Swing states might be the deciding issue. One mustn’t neglect that Trump received in 2016 regardless of lagging the then-Democratic candidate Hilary Clinton in lots of polls.
Ought to You Purchase Inverse ETFs?
Whereas markets could attempt to recoup losses on Oct 29 after the steep promoting on Oct 28, uncertainty associated to coronavirus and election will rule world markets. So, it may very well be a sensible determination to brief markets not less than until the election consequence end result. Following are the ETFs that may very well be used to brief markets.
S&P 500 – ProShares Quick S&P 500 SH
Nasdaq 100 – ProShares Quick QQQ PSQ
Dow Jones – ProShares Quick Dow 30 DOG
Russell 2000 – ProShares Quick Russell 2000 RWM
China – Direxion Each day CSI 300 China A Share Bear 1X Shares CHAD
Rising Markets – Quick MSCI Rising Markets ProShares EUM
EAFE – Quick MSCI EAFE ProShares EFZ
Midcaps – ProShares Quick Midcap 400 MYY
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Proshares Quick MSCI Rising Markets (EUM): ETF Analysis Studies
Proshares Quick Dow30 (DOG): ETF Analysis Studies
ProShares Quick SP500 (SH): ETF Analysis Studies
Proshares Quick QQQ (PSQ): ETF Analysis Studies
ProShares Quick MSCI EAFE (EFZ): ETF Analysis Studies
Proshares Quick Russell2000 (RWM): ETF Analysis Studies
ProShares Quick MidCap400 (MYY): ETF Analysis Studies
Direxion Each day CSI 300 China A Share Bear 1X Shares (CHAD): ETF Analysis Studies
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Zacks Funding Analysis
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.