1987 Market Crash – DXY Dollar Index and 10-Year UST Yield Bond yields rarely rise while the dollar falls, as higher yields usually boost currency appeal. This unusual trend signals waning confidence, similar to the pattern seen before the 1987 Black Monday crash. Image: Bloomberg
Market Crash Timeline: Growth of $1 and the U.S. Stock Market’s Real Peak Values This chart shows that patience is key for investment returns, as market crashes are frequent. Image: Morningstar
U.S. High Yield vs. S&P 500 and Time to Recover After Major Market Crashes Historically, credit has recovered faster than equity after major market crashes. Image: BofA Research Investment Committee
Emerging Market Currencies Crash Emerging market currencies have been pummeled by the coronavirus pandemic and the oil crisis. Image: Financial Times
S&P 500 Index – The Crash of 2020 Compared to Crashes of 2008, 1987 and 1929 This chart compares the current decline with 2008, 1987 and 1929 crashes. Image: Tomasz Hońdo
S&P 500 Current Sell-off vs. October Stock Market Crashes of 1929, 1987, and 2008 Chart suggesting that the current sell-off is consistent with the historic crashes of 1929, 1987, and 2008. Image: Longview Economics
Was the US Stock Market Crash on October 19, 1987, a “Black Swan” Event? A “Black Swan” is a metaphor that describes an event that comes as a surprise with a major effect, which is extremely difficult to predict. The theory was developed by Nassim Nicholas Taleb. The US stock market on October 19, 1987,…
Margin Debt and Net Investor Credit Balance NYSE margin debt just blew past $1.5 trillion. Investors are piling into leverage with both hands, leaving little room for error. The market has gotten riskier, more fragile, but that doesn’t mean a crash is guaranteed. Image: Real Investment Advice
S&P 500 CAPE Ratio vs. U.S. Households Holding of Equities % Total Financial Assets When everyone is piled into equities and valuations are stretched, there isn’t much cushion left. History doesn’t say a crash has to follow, but it does show that markets priced for perfection rarely handle surprises well. Image: Topdown Charts
Two-Month Change in the S&P 500 Since WWII Since WWII, two-month rallies of this magnitude in the S&P 500 have been rare, typically appearing either in the rebound from recessions such as the GFC and Covid-19, or just ahead of the 1987 crash. Image: Deutsche Bank
Average Percentile Rank for U.S. Equity Market Concentration, Valuation, and Magnitude of Rally U.S. equities are flashing familiar signs: rich valuations, heavy concentration, and outsized recent returns. This is less a signal that a crash is imminent and more a reminder that expectations leave little room for error. Image: Goldman Sachs Global Investment Research