[ I N - D E P T H | P R I M E B R O K E R A G E ]
On 12 February , the three main stock indexes
in the US – the Dow Jones Industrial Average , the Nasdaq Composite , and S & P 500 – all finished at record highs . Tech and energy stocks were among the best-performing sectors , while the airline and hospitality industry saw their share of price climbs . At the time , investors largely shook off concerns about how the COVID-19 virus would impact corporate profits and the global economy . Boy were they wrong ! A week later , stock markets worldwide reported their largest one-week decline since the financial crisis . Global markets became extremely volatile entering March , and on 9th of the month , most reported severe contractions in response to the pandemic and an oil price war between Russia and the OPEC countries , led by Saudi Arabia . This officially became known as ‘ Black Monday ’.
In response , regulators across Europe and Asia initiated short selling bans to quell the market freefall , while exchanges enforced circuit breakers , extended trading holidays , and shorterned trading hours .
Comparisons with the global financial crisis came thick and fast , and attention quickly shifted to those firms that experienced both heavy losses and profits .
Most hedge funds , including those run by industry titans such as Ray Daliio and Michael Hintze , were unable to protect investors from the market turmoil . According to data compiled by Bloomberg , three in every four hedge funds lost money , with some down as much as 40 % in March .
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