Il 3 September of the 1929, exactly 91 years ago, the index Dow Jones of Wall Street reached 381,17 points. An historic record, at the time, achieved after a long series of spectacular increases which since 1924 had led the Dow Jones to multiply its value by five.
As everyone knows, though, the run of the glowing 20s would end in a crash. During the month following that September 3, the Dow Jones fell sharply: first it fell 17%, then it recouped about half its losses, then it folded again. To the operators it already seemed like a nightmare, but the worst was to come the 29 October. That day, which went down in history as the "Black Tuesday” (or, in America, “Big Crush”), the panic selling worst ever. It was the height of the crisis, during which 16,4 million shares were traded: never before had such a high number been recorded in a single session. The following days did not bring any rebound, on the contrary: on November 13 the Dow Jones was at 198,6 points and to return to pre-crisis levels it would have had to wait until the end of 1954.
What's happening today though? On Wall Street, the index has just closed the month of August with a spectacular rise: +7,6%. Unlike the Nasdaq and the S&P500, the DJ hasn't updated record after record in recent months: he currently travels at 28.646,65 points and the last historic surge dates back to January 15, therefore in the pre-Covid era, when it had reached the 29 thousand mark.
In any case, the recent performance of the Dow Jones remains more than positive, above all thanks to the guarantees received from the Fed, which promised low rates for a long time, and to a can new government intervention. US Secretary of State Steven Mnuchin stressed on Tuesday that the economy urgently needed fiscal aid and said he was ready to meet with House Speaker Nancy Pelosi at any time to unblock the fiscal aid package.
It is to be hoped that the ocean of liquidity in circulation is not fueling new financial bubbles and that today's good performance has nothing to do with the record of September 3, 1929.
