I was searching about Stock market and there I found Black Monday related to Stock Market. What is Black Monday in Stock Market ?
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Black Monday or also called "The Crash of 1987", refers to Monday, October 19, 1987, when stock markets around the world crashed shedding a huge value in a very short time. It became an example of the power of the lack of investor confidence and the interrelation of global financial markets and economic factors.
Black Monday is perhaps the most famous trading day. However, on this day the stock market falls down to 22.6%. During August (1982 - 1987), it was a time of Bull run because taxes were reduced at this time so, earnings were increased. Companies were earning more, hence the value of stock market was rising. Also, trade deficit of USA was increased to 112 billion in four years and value of US dollar was decreasing. That's why investors started to invest in other countries instead of USA. To stop this, government had tied the monetary policy i.e. the money supply was decreased. By seeing the more interest rates, investors move back to US but interest rates were still high. Because of this, stock market fall down because companies had to expense on high interests so earnings were less and revenues of companies ultimately decreased. However, stock market was overvalued from Jan to Sept. 1987.
Investors know this and they started to use the computers without even knowing that they will complete the stocks or not. Demand increased and supply was less. So, they had to face from financial crisis due to drop in the stock market.
Black Monday is perhaps the most famous trading day. However, on this day the stock market falls down to 22.6%. During August (1982 - 1987), it was a time of Bull run because taxes were reduced at this time so, earnings were increased. Companies were earning more, hence the value of stock market was rising. Also, trade deficit of USA was increased to 112 billion in four years and value of US dollar was decreasing. That's why investors started to invest in other countries instead of USA. To stop this, government had tied the monetary policy i.e. the money supply was decreased. By seeing the more interest rates, investors move back to US but interest rates were still high. Because of this, stock market fall down because companies had to expense on high interests so earnings were less and revenues of companies ultimately decreased. However, stock market was overvalued from Jan to Sept. 1987.
Investors know this and they started to use the computers without even knowing that they will complete the stocks or not. Demand increased and supply was less. So, they had to face from financial crisis due to drop in the stock market.