Why are prices falling on Black Friday

Black Friday

As "Black Friday“October 25, 1929 is referred to in particular. On that date, the New York Stock Exchange completely collapsed, which subsequently triggered one of the worst global economic crises ever.

Black Friday - US stock market crash

Black Friday of October 25, 1929 became general regarded as the beginning of the following world economic crisis. It is also “black” because of its effects, among other things played into the cards of the National Socialists in Germany. So the regime could in the course of the economic crisis and the dissatisfied population die Securing power in the Weimar Republic. Paradoxically, the actual price losses on the New York stock exchanges did not occur on Black Friday itself, but on the days before and after:

  • It was already on October 23rd, a Wednesday Dow Jones dropped from 326.51 points to 305.85 points.
  • Another 6.39 points then went downhill the following day.
  • On Black Friday, the index even rose by 1.75 points.
  • But on the following trading day, i.e. Monday, the Dow Jones suffered a loss from 298.97 to 260.54 points.

About a week after the first sagging came on Loss of over 100 points and thus round 33 percent to book. These losses were so severe for the US economy that they turned almost immediately into a recession slipped. Companies had to insolvency register, production was cut back sharply and hundreds of thousands of workers became unemployed.

Because the USA was the most important economic power even then, the losses also affected Europe. Here, too, the stock exchange prices collapsed, and internationally operating companies got into great difficulties. In Germany, which was already torn by war, the effects were drastic, with unemployment being the rule rather than the exception.

Black Friday shopping

More than 80 years later, “Black Friday” should be known primarily to shopping enthusiasts. But:This day has nothing to do with the stock market crash in New York. Rather, the shopping day of Black Friday refers to the day after Thanks Giving, which always takes place on the last Thursday in November. Because on this day shopping was no fun even in the 1960s: All Americans are on vacation, the streets are full and the shopping malls overcrowded. The shopping enthusiasts move through the passages like a “black crowd”.

Another explanation for the use of the term is that this day brought traders “black” numbers. Regardless of the terminology used, this has Date has established itself as a real shopping day in Germany, especially in online retail. The dealers are luring thousands of customers into the shops with supposedly generous discount campaigns and - especially with a view to the following Christmas party - they can practically empty the warehouse.

Black Friday - Definition & Explanation - Summary

  • The New York stock market crash of 1929 is generally referred to as Black Friday
  • In this context, one of the worst global economic crises ever was triggered
  • Black Friday in retail, on the other hand, is the day after the American Thanks Giving