My investing muse - What causes stock prices to drop - black swan “omicron" (26Nov2021)
On 26 Nov 2021, the global stock market took a hit due to concerns of a new Covid19 variant from Africa that was reported in South Africa, Europe, Japan & Hong Kong. WHO has named this variant “omicron". This has led to Dow dropping 900 points on Black Friday, the single biggest day drop this year. The good news reported was that this variant can be detected using PCR testing. Vaccine makers are already checking the effectiveness of their vaccine with $Moderna, Inc.(MRNA)$ looking into variant-specific treatments/vaccines. The stock market did not take the news too well and the drop in price of crude oil was a clear sentiment about how this can affect the spending. With concerns, countries imposing lockdowns & limiting air travel, there has spooked the market, causing what is typically known as a " black swan event ". As per the supply and demand curve above (from Britannica), price (of stock) is the result of supply (quantity) and demand (buying & selling...