‘Black Monday’ of 1987 ahead? Expert warns of ‘bloodbath’ in global markets on April 7 amid Trump tariff turmoil
A graduate of the renowned Harvard University with a doctorate in Law, Jim Cramer, the founder of TheStreet and CNBC host of the show “Mad Money”, warned global market investors about a potential bloodbath likely to happen after the stock markets reopen on Monday, April 7, reported multiple media outlets.
According to the news portal NDTV’s report, Jim Cramer expects Monday’s stock market session to likely be similar to the ‘Black Monday’ of 1987, which was marked as the first contemporary global financial crisis on October 19, 1987.
Cramer focused that the director of the stock markets will be dependent on the moves of the US President Donald Trump’s next move in the ongoing trade war between the United States and other nations.
“If President Trump stays intransigent and does nothing to ameliorate the damage that I saw these last few days, I’m not going to be constructive here,” he said, as per the news report.
“If the president doesn’t try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario… the one where we went down three days and then down 22 per cent on Monday, has the most cogency,” said Cramer.
However, the expert also highlighted that now, all people’s hopes and eyes are on Donald Trump to come up with something that can turn a bear market into a bull market, according to the news report.
US Market Crash
The warning comes after the US stock markets witnessed their worst trading session and the largest drop since the COVID-19 global pandemic. More than $5 trillion was wiped off market capitalisation, and the key benchmark indices bore severe losses.
The Dow Jones Industrial Average (DJIA) closed 5.50 per cent lower at 38,314.86 points after losing more than 2,200 points in Friday’s US market session.
The tech stock-heavy Nasdaq Composite also crashed over 900 points, closing 5.82 per cent lower at 15,587.79 points, compared to 16,550.61 points in the previous market close.
S&P 500, at the end of the trading day, closed 5.97 per cent lower at 5,074.08 points, compared to 5,396.52 points at the previous market close.
What happened on Black Monday?
According to the official US Federal Reserve (Fed) records, on October 19, 1987, also known as ‘Black Monday,’ the Dow Jones crashed 22.6 per cent in a single trading session, which remains the largest one-day stock market crash in history.
“At the time, it also marked the sharpest market downturn in the United States since the Great Depression,” according to the US Fed website.
The data also mentions that the ‘Black Monday’ events emphasised the concept of “globalisation”, which was new at that time but later went on to make several noteworthy reforms from the US regulators.
