empty
20.11.2020 12:24 PM
US stock market on verge of collapse

This image is no longer relevant

Despite the coronavirus crisis in the United States, the past six months have been quite positive for American companies. Their shares rose rapidly thanks to investors' activity and government measures to support the economy. But due to the presidential election, the US stock market sank. However, after the news of the effectiveness of the Pfizer coronavirus vaccine, the indices rose sharply.

This news encourages many investors, the euphoria continues in the market. But the market could collapse at any moment, the US Federal Reserve warns. The situation is under control as long as the banks are releasing liquidity. However, everything comes to an end.

In the event of a worsening situation with the coronavirus epidemic or a failed vaccination, huge problems cannot be avoided. The biggest threat is a global quarantine with business closures and massive job cuts.

Debt pulls to the bottom

The company has accumulated huge debts to survive during the drop in income and the sharp decline in economic activity caused by the total quarantine. Today, in the United States, the ratio of public companies' debt to their assets is at its maximum in 20 years.

The commercial real estate market suffered the most. And the insurance sector has accumulated debts unseen since the 2008 financial crisis. In other words, everybody hopes for successful mass vaccination.

According to the Federal Reserve, debt totals $2.25 trillion, or 35% of total corporate bonds. In this case, the possibility of the stock market crash is extremely large.

Moreover, relations between the United States and China remain tense, creating geopolitical uncertainties. As a result, investors may lose interest in risk. This is fraught with a sharp collapse of stock indices.

Another problem is the increase in key rates. Soft monetary policy will end someday. Markets and the manufacturing sector will face great challenges.

Focus on vaccines

As soon as the global lockdown began, US markets collapsed for the first time in 33 years. The Dow Jones, S&P 500, and NASDAQ have dropped nearly 10%.

Billionaire Bill Ekman, the founder of the hedge fund Pershing Square, is confident that countries will have to reintroduce the quarantine despite the supposedly effective coronavirus vaccine. Many companies will go bankrupt. He believes that the worst is yet to come.

Multimillionaire investor Jim Rogers has the same opinion. He believes that the anti-virus measures were excessive and only made the situation worse. Now everyone is mired in debt and demands help from central banks.

Indeed, the effectiveness of the vaccine remains a question. One of the volunteers died after being administered the vaccine by the British-Swedish pharmaceutical company AstraZeneca.

Kate Smirnova,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

Boom bursátil: Nvidia supera los $4 billones, el Bitcoin no se queda atrás, Dow y S&P suben

Los índices suben: el Dow Jones creció un 0,43 %, el S&P 500 un 0,27 %, y el Nasdaq un 0,09 %. Nvidia cerró la sesión. Pronóstico positivo de Delta

10:33 2025-07-11 UTC+2

Trump vuelve al ataque: arancel del 50% sobre el cobre y nuevos golpes a China y la UE

Trump anunció aranceles del 50% sobre la importación de cobre, nuevos aranceles sobre semiconductores y productos farmacéuticos. Declaró que las negociaciones con la UE y China son exitosas. Japón

10:28 2025-07-09 UTC+2

De $4 a $100 mil por moneda – ¿por qué están despertando las carteras BTC «antiguas»?

Siete carteras de Bitcoin «antiguas», creadas en abril y mayo de 2011, se activaron repentinamente. En conjunto, movieron 70 000 BTC – el equivalente a $7,6 mil millones al tipo

Svetlana Radchenko 07:25 2025-07-07 UTC+2

S&P, Nasdaq y Dow suben al unísono: los mercados reaccionan a las sorpresas en el empleo y la política comercial

S&P 500 subió un 0,83%; Nasdaq subió un 1,02%; Dow subió un 0,77%. El crecimiento del empleo en EE. UU. superó las expectativas en junio. Tripadvisor sube tras el informe

11:15 2025-07-04 UTC+2

NonFarm Payrolls, la Fed o el big beautiful bill: ¿qué quebrará al dólar estadounidense?

Wall Street incansablemente marca récord tras récord . El miércoles, el índice S&P 500, impulsado por los gigantes tecnológicos, volvió a alcanzar un máximo histórico. La razón no fue solo

Svetlana Radchenko 07:32 2025-07-03 UTC+2

Paz con China, caos en la Fed: ¿qué es más importante para el dólar?

EE. UU. y China anunciaron nuevos acuerdos comerciales, una noticia que hace no mucho podría haber sido un salvavidas para el dólar. Pero no esta vez. La mañana del viernes

Аlena Ivannitskaya 08:02 2025-06-27 UTC+2

El Bitcoin brilla y se mantiene por encima de los $107 000, y el Nasdaq 100 tampoco se queda atrás: el mercado se anima

Al final de la semana actual, los mercados muestran animación y un repunte: el índice Nasdaq 100 ha demostrado crecimiento, y el mercado de criptomonedas, en particular el Bitcoin, también

Larisa Kolesnikova 13:01 2025-06-26 UTC+2

Juegos peligrosos del dólar: entre un posible colapso y nuevas esperanzas

La moneda estadounidense vuelve a estar agitada, y esta volatilidad continúa intensificándose. En este contexto, algunos analistas predicen el colapso del USD, mientras que otros, por el contrario, confían

Larisa Kolesnikova 13:57 2025-06-24 UTC+2

Trump bombardea Irán: los mercados en pánico, el dólar se dispara

En la noche del domingo, EE. UU. lanzó un ataque aéreo masivo contra instalaciones nucleares iraníes, iniciando una nueva fase de escalada en Oriente Medio. Ya el lunes, los mercados

Аlena Ivannitskaya 07:54 2025-06-23 UTC+2

Trump pensará si vale la pena bombardear Irán: los mercados respiran, el dólar cae

La tensión geopolítica que mantuvo a los mercados en vilo toda la semana finalmente se debilitó, al menos por un tiempo. Donald Trump declaró que se tomará dos semanas para

Аlena Ivannitskaya 08:06 2025-06-20 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.

We are sorry for any inconvenience caused by this message.