What makes stock markets crash?

Steve & Ted
Friday, July 20th
Moneytracker Don Grant talks about a couple of market crashes.
00:08:31

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Actually not be impeached because they're great things for the country to people who wanted to sort of separated. ID seven a thirteen thirty K and it says Stephens of the morning now. 647. Friday three big thing to me. W if you will strike up a marching band whose fault and bullet shoppers sound machine season. Carnival worker admits killing which talk coupled their bodies found in the shallow grave in Arkansas fly. At least eleven dead after tourist duck boat capsized is on table rock lake high wind. The flames pretty things receive a dead. In north Wichita you're going to want to watch out for this one now RR Kansas north of 25 street. Get some lanes blocked near the road buckle that was just too hot and road buckle their they've got it close. And it's trying to fix that again that or Kansas north of 25 street traffic and Kate and as SI did chambers. Sunny and hot today with a 10% chance for rain and high of 99 degrees. Partly cloudy with a 20% chance for rain tonight the overnight lows 71. Saturday sunny and hot tomorrow's 993. Now partly cloudy northeast wind at five miles per hour. 69 degrees strangers as news whether that is brought to you by the monarch. Seeking the perfect patio for conversation and cocktails the monarch offers military discounts for current and retired veterans the monarch in Villeneuve. 649 Stevens and Don Ramsey of the demonic record with a us this morning morning done. These are raining on human drove in this morning not at all and they're out there accompany New Zealand they're tested four day work weeks as he experiment. Experiment was so successful it wants to make it permanent. Perpetual guardian which helps customers manage their wills and estates release the results of its two month trial this week. Company said its employees all reported greater productivity better work life balance and lower stress levels from working one less day a week. That's been working twelve hour days that are big surprise the employees more than 240 of them were still paid for five days. During the experiment which ran from the beginning of Bartlett isn't dumb experiment done the trial was conducted by outside researchers. What did they work longer days I Canada. Did say though than say but you're talking about working out wills and estates. I'm not sure that it's time sensitive where they've got to be there and every minute well I'm in it and the other thing is of course and our work. Most of our people out there listing well good many of them are working five day weeks. And we're not here or sixty or more dollars more clubs do you guys. I think I think if if you could do with your business run for twelve hour days. You know Vienna and Jake AB. I would rather do that give full three day weekend every week you now know our I'd like to erect like you know like 140 hour day. The that would be fun yeah that was stricter we're two days and banks and other other large US stocks fell Thursday but smaller numbers climb to. Making for a mixed finish on Wall Street the S&P 500 index slid eleven points the Dow fell over 134 points. And the NASDAQ Composite. Gave up 29 points then Don grant CFP the money dressing me that's me man what makes a stock market crash. I don't know but it will don't know makes a what a mayor stock market crash what many are asking you oh I'm answering a question. Oh boy okay well you know earlier this year we will stock markets around the world take a pretty big dip began here the Dow dipped about four point 5% Japanese markets felt the same market amount following by appalled by the European markets. When we stumbled sodas the rest of the world and sometimes vice Versa. Well we attempted that dipped. You know we we attributed rabid that dipped to more talks have rising interest rates in response to fears of inflation the Fed. Often use their control over the EU lending rates to encourage growth in our economy or to slow it down that's just one reason. In October of 2016. We experienced this flash crash. The British currency the pound plunged 6%. Against the dollar in just two minutes of trading. It was do or trader's mistake. Loading a sell out rhythm into a trading. Program that that exceeded the intended cell. Large sell orders to lead to a sudden drop in liquidity because there were not enough buyers to match the cells. Thus driving the price down. Another crash was in October of 1987. New prime remember there is black Monday. The Dow plummeted nearly 23%. To one day. That was the impact of the largest one day decline recorded before or after that date. A massive number of orders to sell. Once corresponding stocks hit a certain limit. Called stop loss orders created a domino effect that took down the entire market causing the crash. The market recovered rather quickly ports time but it was driven by expectations. Of interest rate hikes we talk about that a lot here. And then there are bubbles when stock markets continue to rise in prize but the actual fundamentals behind those stocks don't that's called a bubble. We've seen several in the past couple of decades the bubble. Is often created by perceptive or emotional drivers that build up the cost of a stock when it's really unwarranted. It's called herd behavior. Once the inadequate fundamentals are broadcast. The bubble pop. Leaving latecomers to the party to absorb losses. If you invested in the stock market there's no sure way to avoid crashes in bubbles. Diversification across several investment ideas or classes. Including those outside of the stock market is no guarantee but it has been shown to help mitigate some of that volatility. That is found when investing in just one area in a course. You have any questions on this or want discuss how it's working for you give me a call the number 63422. 22 it was a solid party got the procedures in India. You know triggers in place that we could never have another a 1929 crash. Is he tees it im. There are there are stops at a certain at a certain level or certain percentage of a drop the markets will get shut down automatically brake or 44. An hour or something like that in and is certain other level may shut it down for the full day and we've seen as actually pop in riot act at times. Also it is something we should be. Losing sleep about it by now. Out now known right now I don't think I don't see any it's that they are the markets a little bit rich right now but I don't see any sort of that. The bubble behavior going on right now the fundamentals are very strong for most companies. All right did today's national moon day. Silly dude you don't no drop no turnaround are we Don and you'd go there barely Sharia. Investigators. And the moon up there were we re that yes landed on the seat 1969 they called Apollo eleven men went to the moon and you don't let this dogs and all the papers. I hear about it. Thanks I don't know it was a different and I was stages faith. All right well that's what we're talking about morning. It was real journalism and at any rate do indeed this is the moon days as a kind of moved on like talk about we re weave him union later new. Wounded the one of the crash never had to now. No desire whatsoever I appreciated what they do tremendously that I'm claustrophobic when ever may be stuck in something and knowing that I can't get out my lifeline this is what they do and he sent to India were little void here at Columbia astronaut. Now aren't any sports announcers got a pilot the when obvious or be it does baseball player or cowboy wanna the other. And leaving it now over to one now on Oprah to you got it thanks guys 655 now Stephen did. On McCain in his has skimming up at 7 o'clock top of the hour the latest. On the yet duck boat capsized in the table rock lake in France and that's coming up Steve is dead on tape and assess.
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