The worst drops in Piazza Affari from 2000 to today: how long they lasted and how much the bag has put to recover

How long will the storm last on the financial markets? The question was meandered for days in the business houses around the world, attentive to grasp each relaxing signal to guess the minimum point of the bags and the start of the ascent. That is, to find the perfect time to invest at the lowest price and magnify the earnings by taking advantage of the rebound towards the maximum.

The black jersey in Piazza Affari

The exercise is particularly difficult with Donald Trump who is overwhelming investors with a burst of statements, often contradictory. From the announcement of the new duties on the world of April 2, so, Piazza Affari has lost almost 20 percent, resulting in the worst price list in the world. Then the surprise announcement of the suspension of rates for 90 days led to a powerful rebound. The history of recent financial crises, however, recommends prudence in the forecast on their duration: much will depend on the transmission of the financial crisis to the real economy, as evidenced by an analysis of Intermonte on the worst drops of the FTSE MIB from 2000 to today.

Short -term storms

Huge shocks, but with limited consequences on the economy they tend to have a significant but short -lived impact on bags. So it was, for example, for The twin towers in 2001 which led Piazza Affari to lose 24% within 11 days but then to rebound by 36% in two months, exceeding the levels preceding the terrorist attack. So it also happened in the case of the pandemic crisis in 2019 and the Russian invasion in Ukraine in 2022when the immediate intervention of governments and central banks limited the damage to the economy, even if the FTSE MIB took several months to return to status quo ante.

Long -term crises

The collapses of the stock exchange subsequent to the great financial crisis of 2008 and to the 2011 sovereign crisis of 2011 have proved to be another duration. In both cases, in fact, The malaise of finance has poured on the real economy – or, which is the same, has anticipated it – By precipitating the country in recession and markets in a long negative spiral. In 2008, 658 days were needed in Piazza Affari to touch the bottom (-71%), while in 2011 even 834 days (-46%) took place.

The duties crisis

In which category does the war of Trump’s duties are included? Is it a momentary turbulence or a long -term crisis? If the discrimination is the transmission of the shock from finance to the real economy, then the risk of falling back in the second case is high. Goldman Sachs has in fact raised the probability of an American recession in the next 12 months from 35 to 45%, only to review his estimates after the announcement of the suspension. Among the risk factors, the experts of the American bank also cite the danger of a boycott from the United States by foreign consumers and tourists which would entail an impact of 0.1-0.2% on the American gross domestic product. And they note that from the announcement of the first Trump duties in March, the arrivals of foreigners in the 12 major US airports dropped by 13%. For JPMorgan analysts, however, the danger of a global economic crisis is even 60%.

The analysis of Intermonte

Of course, everything will depend on the next moves of Trump and their credibility over time. «We don’t know if this correction is finished e Much will depend on how the ongoing iron arm between Trump ends and the financial markets that rejected the duties announced on April 2 with the strong calm», Observes Alberto Villa, head of the research of Intermonte. « What we can start to hypothesize are the negative effects related to the uncertainty that this new US administration is entailing and that lead to direct (duties) and indirect effects (slowing down of growth, weakness of the dollar, market performance) on profits », continues. « A preliminary impact could be a reduction of the reduction of the expected profits around -5/-10%, already largely reflected in the downward movement of the market. Instead, what remains to be understood is the greatest risk prize that could penalize the market due to the effect of the macroeconomic uncertainty existing ».