Skip to main content

Market Overview

Will Today Become Britain's Black Friday? Stock Panic Through The Years

Share:
Will Today Become Britain's Black Friday? Stock Panic Through The Years

With market mayhem widespread on both sides of the pond following a referendum vote for Britain to leave the European Union (EU), the full extent of the carnage remains to be seen. The widespread hysteria and effect on the British pound solicits comparisons to Britain’s so-called “Black Wednesday,” when the pound was withdrawn from the European Exchange Rate Mechanism, a forerunner to the EU.

The “Brexit” vote prompted some to call Friday Britain’s “Black Friday.” For a little historical perspective, here’s a look at other “black” financial days from the past:

  • Black Friday: The originator of the term, Black Friday occurred September 24, 1869, when gold speculators collapsed the gold market, crashing the stock market as well.
  • Black Tuesday: The market fell dramatically on October 29, 1929, heralding the beginning of the Great Depression.
  • Black Monday: The biggest one-day stock market drop ever on October 19, 1987, when the Dow Jones slipped more than 22 percent.
  • Related Link: The Fed Is "Carefully Monitoring" Global Markets

    After the vote, the British pound plunged more than 10 percent initially, although it has recovered a bit since. George Soros, who made a fortune shorting the pound back in 1992 before Britain’s Black Wednesday, predicted a Brexit vote could cut the value of the pound by 20 percent.

    Interestingly, Britain was able to combat the market turmoil after Black Wednesday by cutting interest rates, which took some pressure off businesses and individuals. That is a tool the Brits can’t very well put to use Friday, as rates officially stand at only 0.5 percent.

     

    Related Articles (EWU + SPY)

    View Comments and Join the Discussion!

    Posted-In: News Eurozone Politics Forex Events Global Top Stories Economics Best of Benzinga

    Don't Miss Any Updates!
    News Directly in Your Inbox
    Subscribe to:
    Benzinga Premarket Activity
    Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
    Market in 5 Minutes
    Everything you need to know about the market - quick & easy.
    Fintech Focus
    A daily collection of all things fintech, interesting developments and market updates.
    SPAC
    Everything you need to know about the latest SPAC news.
    Thank You

    Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com