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Quote of the Day

“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.”

Peter Lynch

This day in history would be a stark reminder for investors that stock market declines are going to happen whether you are ready or not.

March 9th – This Day in Stock Market History

March 9th, 1924 – J.P Morgan Company works out a deal to lend to the Bank of France to help stabilize the Franc.

The bank was in the middle of a nationwide panic as the value of the Franc was plummeting against the Pound and the Dollar.

On this day, the Franc’s exchange rate to the Pound Sterling was 123.

New York Times coverage of JP Morgan rescue of Bank of France

J.P Morgan would provide $100 million credit line to the bank in exchange for the bank pledging its gold as collateral. JP Morgan would receive 6% interest on the loan.

The deal would work, by March 24 the rate of Francs to Pound Sterling would be down to 78.

March 9th, 1933 – FDR signs the Emergency Banking Act

The Act came 4 days after FDR issued Proclamation 2039, which ordered all banks across the country to close.

See more on our March 6th This Day in History page.

The Emergency Banking Act had a few major implications to the nation’s finances.

  • The Act temporarily took the United States off of the gold standard. (One month later FDR would criminalize gold ownership).
  • The Act authorized the Federal Reserve to inject capital and/or provide loans to banks.
  • The Act created bank deposit insurance. The US Government was now guaranteeing all banking deposits.

The Act would ultimately prove to be successful. When banks would reopen on March 13th, Americans would re-deposit half of the cash they had previously withdrawn in a single day.

When the stock markets would reopen on March 15th, it would be the highest single day percentage rise in stock market history. The Dow would rise 15.3%.

Source: It Was a Very Good Year: Extraordinary Moments in Stock Market History

March 9th, 2009 – The Dow closes at 6,547.05, a closing level that would become the bottom of the great financial crisis.

The Dow had its lowest intra-day level on March 6th, 2009, when the index briefly touched 6,469.95. However, this day represents the lowest closing value of the Dow in the crisis.

The S&P 500 closes at 676.53 also a closing low and the bottom for the financial crisis. Like the Dow, the S&P would briefly trade lower on an intra-day basis on March 6th, 2009 when the S&P 500 index went as low as 666.75. However, this day would be the lowest closing level of the S&P 500 during the financial crisis.

March 9th, 2020 – US stock markets plummet and circuit breakers are tripped for 25 minutes as the coronavirus spreads, and Saudi Arabia and Russia embark on a price war by announcing they will significantly produce over OPEC’s previous guidance.

The decline focused on financials and energy stocks – BP fell 19%, ConocoPhillips fell 24%, Exxon fell 12%, and Halliburton fell 37% on this day alone!

The decline was only part of the carnage that energy stocks faced during the prior year. Here’s how various oil company stocks were doing over the prior year after the market closed on this day in 2020:

WTI Crude prices fell as much as 34% on the day, to $27.34 per barrel, before rebounding slightly to close at $31.31.

Large banks such as JP Morgan, Wells Fargo, and Bank of America were all off more than 10% on the day.

Yields on US treasury bonds also made incredible moves. The yield on the 30-year US Treasury, which traded above 2.25% just 2 months prior, fell to 0.698% before rebounding back to 1% by the end of the day.

Best March 9th in Dow Jones Industrial Average History

1906 – Up 1.84%, 1.27 points

Worst March 9th in Dow Jones Industrial Average History

2020 – Down 7.79%, -2,013.76 points

Read of the Day

Our quote of the day was from legendary investor Peter Lynch.

We have a post on his investment philosophy, and where he would look to find values during significant stock market declines, here:

A Look Into Peter Lynch’s Investment Style – 5 Key Criteria – What Would He Buy Today?