Bill Holter’s Commentary
Does anyone remember hearing “we will go to bed on a Friday night and wake up to an entirely different world on Monday”?
S&P 500 Plunges 7%, Triggering Market-Wide Stock Trading Halt
March 9, 2020
(Bloomberg) — The severe rout in U.S. stocks triggered trading curbs that the New York Stock Exchange put in place after the 1987 Black Monday crash.
A 15-minute trading halt took hold after the S&P 500 Index fell 7% to 2,764.21 as of 9:34 a.m. in New York, triggering the breaker for the first time since December 2008 at the depths of the financial crisis. The gauge extended losses to 7.2% when trading resumed at 9:49 a.m.
“Even though people are concerned it could create more problems, it does allow people to step back and re-assess what they’re doing,” said Matt Maley, an equity strategist at Miller Tabak & Co. “The one thing is, it’s been a long time since any of these circuit breakers kicked in. Back then, it was positive. It allowed people to calm down a little bit.”
Another 15-minute pause will happen if losses reach 13%, a drop that would put the S&P 500 at 2,585.96. If the decline hits 20%, or 2,377.9, markets will close for the day. Only the 20% rule applies in the final 35 minutes of cash trading. Traders have never seen a 13% or 20% breaker trip.
The last time stocks trigged the 7% circuit breaker, on Dec. 1, 2008, the S&P 500 Index ended the day down 8.9%.